Gold Technical Analysis | Forexlive

Gold has jumped back strongly last week following
the surprisingly dovish FOMC decision where
the Fed increased the rate cuts expected in 2024 to three and Fed Chair Powell
delivered some dovish comments. Last Friday, the comments from Fed’s Williams
triggered a drop in Gold as he pushed back a little against the aggressive rate
cuts pricing for 2024. In the bigger picture, the fall in real yields is a
bullish driver for Gold and as we head into the rate cut cycle Gold should
remain supported.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Gold recently
broke below the trendline and
extended the selloff from the all-time high to the 1973 level. The price
bounced back strongly following the surprisingly dovish FOMC decision and
retested the broken trendline that acted as resistance. The sellers stepped in
with a defined risk above the trendline to position for a drop into the 1930
swing level where we can also find the 61.8% Fibonacci retracement level
for confluence.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that the sellers
had also the confluence with the 38.2% Fibonacci retracement level of the
entire selloff from the all-time high. The price is now bouncing on the red 21 moving average as the
buyers are starting to tentatively fade the last Friday’s drop caused by some
Fed speakers where they pushed back a little on the aggressive market’s rate
cut pricing. A break below the moving average should see the sellers increasing
their bearish bets and drive the price into the 1930 level.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see that Gold
formed a range after the big rally following the FOMC decision. That range got
broken last Friday as the price fell below the 2030 support and
what we are seeing right now might just be a retest of the broken support
before another selloff. That’s why what happens around the 2030 level will
likely decide where Gold will go next:

• A break
  to the upside should invalidate the bearish setup and see the buyers increasing
  the bullish bets into new highs.
• A
  rejection and a new lower low will likely lead to a drop into the 1930 level.

Upcoming Events

This week is a bit empty on the data front as we head
into the Christmas holidays. On Wednesday, we have the US Consumer Confidence
report. On Thursday, we get the latest US Jobless Claims data, while on Friday
we conclude the week with the US PCE report. Strong data is likely to weigh on
Gold while weak figures should support it.

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