Gold failed to break above the key 1985 resistance and erased some of the gains from the Israel-Hamas war. Last week though, the US CPI report missed across the board and triggered a rally in Gold back into the key resistance. The yellow metal was also supported by the miss in the US PPI data and especially by the miss in the US Jobless Claims figures.

The US labour market is now showing more pronounced signs of softening, so taken everything together, the market doesn’t expect the Fed to hike anymore and instead it’s pricing in the first rate cut in May 2024. These expectations led to a fall in real yields and the US Dollar, and favoured the increase in Gold prices.

Gold Technical Analysis – Daily Timeframe

Gold Technical Analysis
Gold Daily

On the daily chart, we can see that Gold bounced on the 38.2% Fibonacci retracement level and extended the rally following the miss in the US CPI report. The price has now reached the key 1985 resistance again and the buyers will want to see a strong break above it to confirm a rally into the all-time high at 2076.

Gold Technical Analysis – 4 hour Timeframe

Gold Technical Analysis
Gold 4 hour

On the 4 hour chart, we can see that the price bounced on the upward trendline where we had also the confluence with the 50% Fibonacci retracement level and the red 21 moving average. This is where the buyers are likely to pile in with a defined risk below the trendline to position for a break above the key resistance. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and position for a drop into the 1950 support.

Gold Technical Analysis – 1 hour Timeframe

Gold Technical Analysis
Gold 1 hour

On the 1 hour chart, we can see more closely the bullish setup with the price now compressed between the key resistance and the trendline. A break above the resistance should lead to an even stronger buying momentum as the buyers will increase the bullish bets into the all-time high. The sellers, on the other hand, should wait for a break lower but keep a close eye on the data as that is likely to support Gold further.

Upcoming Events

This week is pretty empty on the data front with the US on holiday for Thanksgiving Day in the final part of the week. Tomorrow, we have the FOMC Meeting Minutes but it's unlikely to be market moving given that it's three-weeks old data. On Wednesday, we have the US Jobless Claims report which is probably going to be the most important release of the week. Finally, on Friday, we conclude the week with the latest US PMIs. Again, weak data is likely to support Gold further, while strong readings should weigh on it in the short term.

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