On the daily chart below for Gold, we can see that gold is pulling back all the way down to our projected target at the 1934 level where we can also find the 50% Fibonacci retracement level and the trendline. The correction started once Gold reached the record high at 2076 and we got a hot NFP report. Given that the Fed left a door open for another hike in case the data remained strong, the market started to reprice interest rates expectations on the hawkish side due to several better-than-expected economic reports. Therefore, the mix of good US data, higher Treasury yields, and stronger USD weighed on gold and sent it lower.
Gold Technical Analysis
On the 4 hour chart below, we can see that the we got a pullback recently into the downward trendline where the sellers piled in for another push to the downside as the repricing in interest rates continues. We also haven’t got any bad news about the banking sector lately, so the fears on that side dissipated. The target now is of course the support zone at the 1934 level where we find the trendline and the 50% Fibonacci retracement level.
This will be a strong area of interest. The buyers will lean on that area with a defined risk below the zone to target another rally towards the record high. The sellers, on the other hand, will want to see Gold breaking through that zone to pile in and push the price towards the 1800 support erasing the whole post-SVB collapse rally.
On the 1 hour chart below, we can see that at the moment Gold is trading in a little box as traders are probably waiting for more data to push in either direction. Anyway, a break below the support should take gold to the 1934 level, while a break above the downward trendline should send it towards the 2000 level. The data to watch next are the US Jobless Claims today and the US PCE tomorrow. Beats to the forecasts should weigh on Gold, while misses should support it.