Fundamental
Overview
Gold failed to extend the
rally above the resistance zone around the 2723 level and pulled back as we got
a technical break, and the US
PPI came in higher than expected.
In the bigger picture, the
market’s pricing remained largely unchanged around three rate cuts by the end
of 2025 but the rise in real yields weighed on the market as some inflation
fears are starting to build up.
Moreover, we have the FOMC decision
next Wednesday and although the central bank will likely match the market’s
pricing, we could have an overall hawkish event. The market participants might
want to err on the defensive side which could limit the upside in gold.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold rejected the resistance
zone around the 2723 level and extended the drop into the 2675 level as the US
PPI surprised to the upside. The buyers will want to see the price breaking
above the resistance to increase the bullish bets into a new all-time high, while
the sellers will look for technical breaks on lower timeframes to keep pushing
into new lows.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that we have a strong support zone around the 2660 level which acted as
resistance in the previous range. If we get a pullback into it, we can expect
the buyers to step in with a defined risk below the support to position for a
rally into new highs. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into the 2600 level next.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that the price broke below the upward trendline yesterday that was defining
the bullish momentum on this timeframe. The sellers piled in on the breakout
and increase the momentum as the US PPI beat expectations.
We have now some
consolidation around the 2680 level which might turn into a bear
flag if the price were to break below the counter-trendline. In such a
case, we can expect another flush lower into the 2660 support. The red lines
define the average daily range for today.
