Gold has been rallying almost non-stop in the past couple of weeks as the bullish drivers started to accumulate. The US data lately has been showing signs of weakness, especially on the labour market side, and this led to the market pricing in more rate cuts for next year. More recently, some hawkish Fed members shifted their tone to a more dovish stance with Waller being the main example as his comments increased the amount of rate cuts priced for next year. All of the above, contributed to the fall in real yields and the US Dollar which is bullish for Gold.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold extended the rally to new highs reaching the 2050 level and now being very close to the all-time high at 2076. The recent rally got a bit overstretched as depicted by the price distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers should wait for a pullback into the trendline where they will have a better risk to reward setup and the confluence with the red 21 moving average and the 38.2% Fibonacci retracement level. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into the swing low at 1950.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action with the market consolidating a bit after the strong push to the upside in the last two days. This is still a buyers’ market, so the sellers should wait for a break below the trendline before considering short positions. The buyers, on the other hand, should wait for the pullback into the trendline or a break above the counter-trendline before entering new long positions.
Upcoming Events
Today we will get the US PCE and US Jobless Claims data with the market likely focusing more on the Jobless Claims figures given that we already saw the latest inflation data with the US CPI report just two weeks ago. Tomorrow, we conclude the week with the US ISM Manufacturing PMI which missed expectations by a big margin the last time. Weak data should give a further boost to Gold while strong figures will likely lead to a pullback.
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