Fundamental
Overview
Gold remains mostly rangebound
as the market continues to wait for a catalyst to pick a direction. This week
the main events are the US-China trade talks in London and the release of the
US CPI report.
On the trade talks side, the
expected positive outcome will likely keep a lid on further gains. On the CPI front,
higher than expected data could lead to more downside in the short term for the
precious metal as the market would expect less rate cuts this year.
In the bigger picture, gold
remains in an uptrend as real yields will likely continue to fall amid Fed
easing. But in the short-term the repricing in rate cuts expectations could
weigh on gold, so watch out for the US CPI report tomorrow.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold pulled back to retest the broken downward trendline where the buyers stepped in
to position for a rally into the 3438 level. The sellers will want to see the
price breaking lower to extend the drop into the major upward trendline around
the 3200 level.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we have a minor resistance
zone around the 3337 level where the price got rejected from several times in
the past days. That’s where we can expect the sellers to step in 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 higher to pile
in for a rally into the 3438 level next.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, there’s
not much else we can add here as the sellers will look for a rejection from the
resistance, while the buyers will target a break to the upside. The red lines
define the average daily range for today.
Upcoming
Catalysts
Today, we have another round of US-China trade talks in
London. Tomorrow, we have the US CPI. On Thursday, we get the latest US Jobless
Claims figures and US PPI. On Friday, we conclude the week with the University
of Michigan Consumer Sentiment report.
Watch the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
