FUNDAMENTAL
OVERVIEW
Gold has entered a
consolidation phase as the bearish momentum eased somewhat. The fundamentals
haven’t changed at all as the US-Iran war is still ongoing and the disruption in
the Strait of Hormuz is keeping oil prices around triple digit levels. This should keep the bearish bias intact for now.
There has been stronger jawboning
from Trump though as he started to tout the negotiations and a potential deal
almost daily now. Just today, WSJ reported that Trump would be open to
end the war without pushing for a reopening of the Strait of Hormuz. That would
be great news for the markets as the Iranians will likely reopen the Strait as
soon as the US forces withdraw.
But we will need Trump to
announce that to make it happen. He’s certainly very uneasy right now with the
stock market making new lows, much higher Treasury yields, triple digit oil
prices and the Fed in “wait and see” mode.
Given the positioning in
the market, the end of hostilities will most likely boost gold prices in the
short-term as the hawkish interest rates bets would get erased quickly. On the
other hand, further escalation of the conflict would add more pressure on gold
and likely drag prices down into new lows.
As a reminder, Trump’s “ceasefire”
ends on April 6 and he mentioned that he’d like to have a deal before that date,
so keep a close eye on the headlines and especially on his Truth Social
account.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold is consolidating below the broken trendline as traders await new
catalysts to pick a direction. There’s not much we can glean from this
timeframe, so we need to zoom in to see some more details.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we
have a downward trendline defining the bearish momentum and the resistance zone
around the 4,700 level. The sellers will likely lean on the trendline with a
defined risk above the resistance to position for a drop into the major upward trendline.
The buyers, on the other hand, will look for a break above the resistance to
pile in for a rally into the 5,000 level next.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, we have
a minor upward trendline defining the recent pullback. The buyers will likely
lean on the trendline with a defined risk below it to keep pushing into new
highs, while the sellers will look for a break lower to increase the bearish
bets into the major upward trendline around the 4,000 level. The red lines
define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US Consumer Confidence and US Job Openings data. Tomorrow,
we have the US ADP, the US Retail Sales and the US ISM Manufacturing PMI. On
Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude
the week with the US NFP report.
This article was written by Giuseppe Dellamotta at investinglive.com.
