FUNDAMENTAL
OVERVIEW
Gold has been in recovery
mode in this first half of the week after experiencing one of the worst
drawdowns in decades. The fundamentals are still against rising prices, so we
either get stuck in a wide range below the January’s high or will see another flush
lower in the next weeks or months.
In fact, on Monday we got a
strong US ISM Manufacturing PMI with the new orders index jumping to the
highest level since 2022. The data didn’t trigger another selloff as the Fed is
mostly focused on the labour market and inflation, but the risks for further
downside remain.
Today, we have the US ADP
and the US ISM Services PMI on the agenda. If we get surprisingly strong data,
we will likely see a hawkish repricing in interest rates expectations which
could weigh on gold. If the data comes out soft, on the other hand, the recovery
could extend into new highs as we await the NFP report next.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
Gold – daily
On the daily chart, we can
see that gold recovered more than half of the losses as the dip-buyers continue
to pile in to target new record highs. There’s not much we can glean from this
timeframe, so we need to zoom in to see some more details.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
Gold – 4 hour
On the 4 hour chart, we can
see that we have a resistance zone around the 5100 level. This is where we can
expect the sellers to step in with a defined risk above the resistance to
position for a drop back into the lows. The buyers, on the other hand, will
look for a break higher to increase the bullish bets into new all-time highs.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
Gold – 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum. The
buyers will likely continue to lean on the trendline with a defined risk below
it to keep pushing into new highs, while the sellers will look for a break
lower to increase the bearish bets into new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we have the US ADP and the US ISM Services PMI. Tomorrow, we get the
US Jobless Claims figures. On Friday, we conclude the week with the University
of Michigan Consumer Sentiment data.
