FUNDAMENTAL
OVERVIEW
Gold found some support from the benign US CPI report on Friday where headline inflation eased
slightly, while the core measure remained unchanged. We saw a small dovish
repricing although the data didn’t change anything in the bigger picture.
Yesterday, gold dropped
again and eventually erased all the post-CPI gains. There was no catalyst for
the move, with analysts blaming thinner liquidity amid holidays in Asia.
Overall, the outlook for
gold remains neutral to bearish at the moment amid improving US labour market
conditions that could trigger a more hawkish repricing if the data keeps
surprising to the upside.
The latest BofA Fund
Manager Survey also noted that “long gold” was the most crowded trade, which
shouldn’t be surprising given the parabolic surge in 2025. Crowded markets have
high risks of aggressive reversals as we’ve seen at the end of January when
gold dropped by more than 20% in just three days.
This week, in terms of
economic data, the focus will be on the US Jobless Claims on Thursday and the
US Flash PMIs on Friday. Barring big surprises, the main risk event might
eventually be the potential US Supreme Court decision on Trump’s tariffs on Friday. In
fact, if the Supreme Court were to rule against the tariffs, gold could
experience another big selloff on positive growth expectations and easing stagflation risks.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
Gold – daily
On the daily chart, we can
see that gold is still consolidating right in the middle of the all-time high
and the major trendline. From a risk management perspective, the buyers will
have a better risk to reward setup around the trendline to target new all-time
highs, while the sellers will look for a break lower to extend the drop into
the 4000 level next.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
Gold – 4 hour
On the 4 hour chart, we can
see that the price continues to get rejected from the strong resistance around
the 5100 level. The price today bounced near the recent low at 4880 that will
now act as minor support. If the bounce extends to the resistance, we can
expect the sellers to step in there with a defined risk above the resistance to
keep pushing into new lows. The buyers, on the other hand, will look for a
break higher to open the door for a rally into the all-time highs. If the price
breaks below the 4880 low, we can expect the sellers to increase the bearish
bets into the 4656 level next.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
Gold – 1 hour
On the 1 hour chart, we have
a minor downward trendline defining the bearish momentum on this timeframe. We
can expect the sellers to lean on the trendline with a defined risk above it to
keep pushing into new lows, while the buyers will look for a break higher to
increase the bullish bets into the 5100 resistance. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the FOMC Meeting Minutes. On Thursday, we get the latest US
Jobless Claims figures. On Friday, we conclude the week with the US Q4 GDP, the
US PCE price index for December, the US Flash PMIs and a potential US Supreme
Court decision on Trump’s tariffs.
