key points:
- Gold remains supported amid geopolitical tensions and weak US data
- Risks in the near term include the US NFP report on Friday and a possible US Supreme Court decision on tariffs
- Big-picture uptrend should persist amid Fed’s dovish response
fundamental overview
Gold is getting support from geopolitical tensions and weak US data. At present the momentum is intact but the US NFP report on Friday may challenge it.
In fact, while the previous report may have been taken with a pinch of salt due to the shutdown-related issues, this should give us a clearer picture. Strong data could lead to bigger downside as traders shy away from expectations of an imminent Fed rate cut, while soft data should continue to support the bullish trend.
Moreover, yesterday the US Supreme Court set Friday as an opinion day, which could see a decision on Trump’s tariffs. If tariffs are reduced, gold is likely to fall amid reduced risks of stagflation. On the other hand, if the tariffs are kept in place, there should not be much change, although this will keep the edge intact.
In the bigger picture, gold should remain bullish as real yields are likely to continue falling amid the Fed’s dovish response. But in the short term, a sharp recalibration of interest rate expectations could weigh on the market.
GOLD TECHNICAL ANALYSIS – DAILY TIME FRAME
gold – daily
On the daily chart, we can see that gold has recovered almost all the losses from last week’s selloff. Still, from a risk management perspective, buyers would be better off risk rewarding a setup around the trendline to position for a rally to a new all-time high. On the other hand, sellers would like to see the price move lower to reach the 3887 level next.
Gold Technical Analysis – 4 Hour Time Frame
sleep – 4 hours
On the 4-hour chart, we can see that we have a minor support zone around the 4400 level. If we get a pullback, buyers will move around support with a defined risk below the minor trendline to position for a rally to new all-time highs. On the other hand, sellers would like to see prices drop below the key trendline.
Gold Technical Analysis – 1 Hour Time Frame
sleep – 1 hour
On the 1 hour chart, we can see that we have the lower bound of the average daily range right around support for today. This should give buyers more confidence for support if we pull back. On the other hand, sellers would need a break below the trendline to open the door for a big pullback into the key trendline.
upcoming catalyst
Today we have US ADP, US ISM Services PMI and US Job Openings data. Tomorrow, we’ll get the latest US jobless claims figures. On Friday, we’ll conclude the week with the US NFP report and a potential US Supreme Court decision on Trump’s tariffs.
