Fundamental
Overview
Gold surged into a new all-time
high today after a strong run that started on Friday. There was no meaningful
catalyst for the latest surge which might indicate that it was just a technical
squeeze. Nevertheless, real yields have been falling steadily since Powell’s
dovish tilt, so that provided a tailwind for higher gold prices.
The focus is now on the US
labour market data that will culminate with the NFP report on Friday. Strong
data might take the probability for a September cut towards a 50/50 chance but
will certainly see a more hawkish repricing further down the curve and could weigh
on gold. Soft data, on the other hand, will likely see traders increasing the
dovish bets giving gold another boost.
In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
Fed easing given their dovish reaction function. In the short-term though, hawkish
repricing in interest rates expectations will likely keep on triggering corrections.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold eventually broke out of the 4-month long range and rallied all
the way up to a new all-time high. This is where we can expect the sellers to
step in with a defined risk above the high to position for a drop back into the
3,245 support.
The buyers, on the other hand, will look for a break higher to increase the
bullish bets into new highs.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we have an upward trendline defining the bullish momentum. If
we get a pullback into the trendline, we can expect the buyers to lean on it
with a defined risk below it to keep pushing into new highs. The sellers, on
the other hand, will look for a break lower to increase the bearish bets into the
3,245 support next.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor upward trendline acting as support. The buyers will
likely keep on leaning on it to push into new highs, while the sellers will look
for a break lower to target the pullback into the next trendline around the
3,438 level. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the US ISM Manufacturing PMI.
Tomorrow, we have the US Job Openings data. On Thursday, we get the US ADP, the
latest US Jobless Claims figures and the US ISM Services PMI. On Friday, we
conclude the week with the US NFP report.
Watch the video below
This article was written by Giuseppe Dellamotta at investinglive.com.