FUNDAMENTAL
OVERVIEW
Gold started to rally
steadily on Friday after we got various reports of evacuations that indicated a
possible strike to follow over the weekend. Sure enough, the US and Israel
launched a coordinated attack against various Iran’s targets that included key
officials and military facilities.
Their operation managed to
kill Iran’s Supreme Leader Khamenei and many other regime officials. Iran
responded with broad attacks against Israel and US bases in various Gulf
regions like Jordan, Kuwait, Bahrain, Qatar, Iraq, Saudi Arabia, and the United
Arab Emirates aimed at building pressure to end the war. The Strait of Hormuz is
virtually closed as traffic fell sharply after at least three ships were
attacked.
Gold opened with a positive
gap and, after a little pullback during the Asian session, started rising again
towards the all-time highs. The main risk for gold buyers is now a
de-escalation, while a prolonged war should keep the precious metal supported
into new record highs.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold extended the gains above the 5,400 level as the US-Iran conflict
triggered a flight to safety. The all-time highs are now the natural target.
That’s where we can expect the sellers to step in with a defined risk above the
record highs to position for a drop back into the major trendline around the
4,600 level. The buyers, on the other hand, will look for a break higher to
increase the bullish bets into new record highs.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we can
see 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 extend the pullback into the 5,100 support where there’s
another trendline for confluence.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, we can
see that the break above the recent high saw more buyers piling in as people
are now trying to chase the price into new all-time highs. From a risk
management perspective, the buyers will have a better risk to reward setup
around the most recent swing low at 5,300 to keep pushing into new highs. The
sellers, on the other hand, will look for a break lower to extend the pullback
into the trendline around the 5,240 level. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US ISM Manufacturing PMI. On Wednesday, we have the US
ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless
Claims figures. On Friday, we conclude the week with the US NFP report. The
data might not matter much this week amid the US-Iran conflict.
This article was written by Giuseppe Dellamotta at investinglive.com.