Fundamental
Overview
Gold continues to push into
new highs as the softer US inflation data last week led to a fall in Treasury
yields and weakened the US Dollar. The latest rally was triggered by Trump’s
threats of tariffs on Canada and Mexico.
It seems like the uncertainty
around tariffs and potentially higher inflationary pressures is giving gold a
boost as a safe haven, although it doesn’t sound like a strong reason for more
upside. We’ve also got some key technical breakouts which might have seen
momentum traders overextending the rally.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold managed to break above the key 2721 resistance yesterday and extended the gains as
the buyers piled in more aggressively to target a new all-time high. The
sellers will need the price to fall back below the 2721 level to regain control
and position for a drop back into the 2600 level.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we have an upward trendline
defining the current bullish momentum. From a risk management perspective, the
buyers will have a better risk to reward setup around the trendline to position
for a rally into a new all-time high. The sellers, on the other hand, will want
to see the price breaking below the trendline to increase the bearish bets into
the 2660 level.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum
on this timeframe. The buyers will likely continue to lean on the trendline to keep
pushing into new highs, while the sellers will look for a break lower to
position for a drop back into the 2721 level. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow, we get the latest US Jobless Claims figures, while on Friday we conclude
the week with the Flash US PMIs.
Watch the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com. Source