FUNDAMENTAL
OVERVIEW
Gold gave back most of its
weekly gains after Trump
disappointed the market in today’s speech. The market had been expecting
something positive, especially after Trump seemed to support a WSJ report
earlier this week, suggesting he might be open to ending the war with Iran
without requiring the Strait of Hormuz to be reopened. Later that same day,
Iran’s president also signalled willingness to end the conflict, provided there
were guarantees.
It looks like the market
wrongly ignored yesterday’s news though. In fact, Trump posted this on his
Truth Social account:
“Iran’s New Regime
President, much less Radicalized and far more intelligent than his
predecessors, has just asked the United States of America for a CEASEFIRE! We
will consider when Hormuz Strait is open, free, and clear. Until then, we are
blasting Iran into oblivion or, as they say, back to the Stone Ages!!!
President DJT”
Trump self-imposed a 5-day
ceasefire last week, then extended it by another 10 days (set to expire on
April 6). At the same time, he made it clear that any ceasefire would depend on
reopening the Strait, despite having downplayed that condition just a day
earlier. He also ended his message with the usual threats.
Moreover, the White House
indicated ahead of the speech that Trump would reiterate a 2–3 week timeline
for ending the war. That stretches well beyond the current ceasefire window,
leaving plenty of room for tensions to escalate again.
In that context, the
market’s rally into the speech was really short-sighted, and it’s not
surprising that those gains quickly evaporated. Looking ahead, we’re
essentially back to square one. Optimism may need to be priced out further,
which should keep the bearish bias intact, at least until the 4,000 level (all
else being equal).
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
Gold – daily
On the daily chart, we can
see that gold got rejected around the confluence of the broken upward trendline
and the downward trendline. The sellers stepped in there with a defined risk
above the downward trendline to position for a drop into the 4,000 level. The
buyers will need to see the price breaking higher to increase the bullish bets
into the 5,000 level next.
GOLD Gold – 4 hour
TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price broke below the upward trendline that was defining the pullback
into the major downward trendline. The sellers will likely pile in around these
levels with a defined risk above the broken trendline and target the 4,000
level. The buyers, on the other hand, will wait for the price to break above
the downward trendline to pile in for a rally into the 5,000 level.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
Gold – 1 hour
On the 1 hour chart, we can
see the price is trading near the lower bound of the average daily range for today. In such instances, we
can generally see a pullback or some consolidation before the next move.
UPCOMING CATALYSTS
Today we get the latest US Jobless Claims figures. Tomorrow, we conclude the
week with the US NFP report.
