FUNDAMENTAL
OVERVIEW
Gold is slowly erasing the
gains as traders are getting increasingly worried of the risk of an escalation
over the weekend. Trump has been jawboning the markets throughout the entire week
with ceasefire comments and claims that Iran has been “begging” him for a deal.
Meanwhile, the US military buildup in the Middle East increased the speculations
of a potential ground invasion.
Late yesterday, Trump
extended the ceasefire through April 6, right as major equity indices were on
the verge of breaking to new monthly lows and Treasury yields were pushing
toward fresh highs. He claimed Iran requested the extension, though Iranian officials
denied it.
It looked like another
attempt to jawbone the markets, but this time it didn’t have the same impact as
earlier in the week. We might see more hedging into the weekend which is likely
to put pressure on gold prices throughout the day.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold is trading right between the two major trendlines as Trump’s
ceasefire stopped the selloff, but the uncertainty keeps the upside limited. 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 strong resistance zone around the 4,700 level where we have the confluence of
the downward trendline and the broken upward trendline. If the price gets
there, we can expect the sellers to step in with a defined risk above the
resistance to position for a drop into the major trendline around the 4,000
level. The buyers, on the other hand, will look for a breakout to increase the
bullish bets into the 5,000 level next.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, we have
a minor resistance zone around the 4,485 level. This is where we can expect the
sellers to step in with a defined risk above the resistance to position for a
drop into the 4,000 level. The buyers, on the other hand, will look for a break
higher to pile in for a rally into the 4,700 resistance next.
We can also see that we
have a minor upward trendline defining the recent pullback. We can expect the
buyers to lean on it to keep pushing into new highs, while the sellers will
look for a break to increase the bearish bets into new lows. The red lines
define the average daily range for today.
This article was written by Giuseppe Dellamotta at investinglive.com.
