Fundamental
Overview
The bullish momentum has
waned this week as traders turned their attention to the US CPI data coming up next
week. The soft NFP report triggered a quick dovish repricing in interest rates
expectations which fuelled a rally in gold as real yields fell.
We’ve also seen more and
more Fed members changing their tone on rate cuts following the NFP data, so
the CPI could either seal a September cut or bring more uncertainty.
In fact, in case the data comes
out lower than expected, the market will likely reinforce the dovish bets and
might even price in higher changes of a third cut by year-end.
On the other hand, higher
than expected figures will likely trigger a hawkish repricing weighing on gold
and keeping us in the range.
In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
Fed easing. But hawkish repricing in interest rates expectations will likely
keep on triggering corrections in the short term.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold continues to slowly edge higher towards the key resistance around the 3,438 level after the
NFP-induced bounce near the 3,245 support. If we get there, we can expect the
sellers to step in around the resistance once again with a defined risk above
the level to position for a drop back into the support. The buyers, on the
other hand, will look for a break higher to increase the bullish bets into a
new all-time high.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that the bullish momentum has waned, and we’ve just been climbing by
inertia. There’s not much else we can glean from this timeframe as there are no
clear levels where traders can lean onto, so we need to zoom in to see some
more details.
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 on this timeframe. The buyers will likely continue
to lean on the trendline with a defined risk below it to keep pushing into the
resistance. The sellers, on the other hand, will look for a break lower to target
a pullback into the 3,350 level next. The red lines define the average daily range for today.
