Gold Technical Analysis | Forexlive

Gold failed to break above the key 1985 resistance
and erased some of the gains from the Israel-Hamas war. Last week though, the US CPI report
missed across the board and triggered a rally in Gold back into the key
resistance. The yellow metal was also supported by the miss in the US PPI data and
especially by the miss in the US Jobless Claims figures.

The US labour market is now showing more pronounced
signs of softening, so taken everything together, the market doesn’t expect the
Fed to hike anymore and instead it’s pricing in the first rate cut in May 2024.
These expectations led to a fall in real yields and the US Dollar, and favoured
the increase in Gold prices.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Gold bounced on
the 38.2% Fibonacci retracement level
and extended the rally following the miss in the US CPI report. The price has
now reached the key 1985 resistance again
and the buyers will want to see a strong break above it to confirm a rally into
the all-time high at 2076.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that the price
bounced on the upward trendline where we
had also the confluence with the
50% Fibonacci retracement level and the red 21 moving average. This is
where the buyers are likely to pile in with a defined risk below the trendline
to position for a break above the key resistance. The sellers, on the other
hand, will want to see the price breaking lower to invalidate the bullish setup
and position for a drop into the 1950 support.

Gold Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the bullish setup with the price now compressed between the key
resistance and the trendline. A break above the resistance should lead to an
even stronger buying momentum as the buyers will increase the bullish bets into
the all-time high. The sellers, on the other hand, should wait for a break
lower but keep a close eye on the data as that is likely to support Gold
further.

Upcoming Events

This week is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Tomorrow, we
have the FOMC Meeting Minutes but it’s unlikely to be market moving given that
it’s three-weeks old data. On Wednesday, we have the US Jobless Claims report
which is probably going to be the most important release of the week. Finally,
on Friday, we conclude the week with the latest US PMIs. Again, weak data is
likely to support Gold further, while strong readings should weigh on it in the
short term.

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