Fundamental
Overview
It looks more and more
likely that gold reached an inflection point this week. The price continues to
edge lower as more and more positive news on the trade front filter through.
Trump delivered some key comments late Tuesday where he not only sounded much
less hawkish on China but also made clear that he had no intention to replace
Fed Chair Powell.
Yesterday, we got a report
saying that the first trade deal is very near and it will likely be with India.
Moreover, the first deal will be the baseline for other deals, so the market
will build future expectations from the first deal. This morning, we got a
positive news from China as the government is said to be considering suspending
the 125% tariff on some US imports.
The stagflationary pricing
got gold to such high prices, and as we start to price out that risk, it’s
normal to see a correction, especially considering that “long gold” has been
the most crowded trade.
In the bigger picture, gold
remains in an uptrend as real yields will likely continue to fall amid Fed
easing. But in the short-term more positive news on the tariffs front should see
more downside for gold as the market readjusts to new conditions.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold continues to edge lower as the market prices out some of the
stagflationary risks. From a risk management perspective, the buyers will have
a better risk to reward setup around the previous high at 3167 to position for
further upside, while the sellers will look for a break lower to increase the
bearish bets into the major trendline around the 3100 level.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that the price is testing again the swing low around the 3284 level. This is where the buyers stepped in with a defined risk below the level to position for a rally into
new all-time highs. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into the 3167 level next.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, there’s not much else we
can add here as the buyers will target a bounce into the 3367 resistance, while
the sellers will look for a break below the 3285 level. The red lines define the
average daily range for today.
Upcoming
Catalysts
Today we have just the final University of
Michigan Consumer Sentiment report. As a reminder though, the market is focused
on tariff related news at the moment, so the data is not as market-moving as it
used to be in the past months.
Watch the video below
ForexLive.com
is evolving into
investingLive.com, a new destination for intelligent market updates and smarter
decision-making for investors and traders alike.
