FUNDAMENTAL
OVERVIEW
Gold got stuck in another consolidation as the US-Iran stalemate extended
further. We’ve been even getting reports of Trump considering a resumption of
the war more seriously as, using Trump’s words, the ceasefire holds on
“life support” after a “garbage” Iran’s peace proposal.
Now, this might just be his usual hawkish rhetoric without substance, but it’s
still something to keep an eye on.
The main problem for gold is the Fed. Although the central bank is still
keeping an easing bias, we are now approaching a point where the Fed is likely
to drop it entirely. If nothing changes before the June meeting, we might be in
for a hawkish surprise as inflation continues to run hot and the US data
remains resilient.
In the short-term, a resolution and the reopening of the Strait will likely
support gold on falling oil prices and increased rate cut bets as inflation
worries would ease. But if the Strait remains closed for longer and oil prices
stay elevated, the risk of the Fed turning hawkish anyway increases.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold is still trading right in the middle of the two key trendlines,
so there’s not much we can glean from this timeframe. We need to zoom in to see
some more details.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we can
see the price is consolidating between the 4,650 support and the 4,770
resistance. We can expect the buyers to continue to step in around the support
to keep pushing into the 4,890 level, and increase the bullish bets on a break
above the resistance. The sellers, on the other hand, will want to see the
price breaking lower to pile in for a drop into the 4,350 level next.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as we might get stuck in this range for an extended
period of time. As mentioned, the buyers will look for opportunities around the
support and on the break above the resistance, while the sellers around the
resistance or on the break below the support. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we have the US PPI report and Trump-Xi meeting. Tomorrow, we get the
US Retail Sales report and the latest US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.
