Gold Technical Analysis | Forexlive

Gold sold off on Tuesday following the hot US CPI
report as it lifted real yields and triggered a strong rally in the US Dollar.
The market continues to trim rate cuts expectations as the economic data keeps
on surprising to the upside. In the big picture, Gold should be supported by
the expectations of a rate cut cycle, but it will need the short term picture
to align or we will continue to see the market remaining under pressure.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Gold broke
through the key support around
the 2015 level following the hot US CPI report. The natural target for the
sellers should be the 1972 level, but we can notice that the price is a bit
overstretched as depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the sellers will have a much better risk to reward
setup around the 2015 resistance where we can also find the confluence with the
trendline and the
61.8% Fibonacci retracement level.
The buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and increase the bullish bets into the 2063 level.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see that the
price has been consolidating ever since the big drop from the US CPI report. We
now have a minor resistance zone around the 1998 level which is what the buyers
will need to break to start targeting the 2015 resistance next. The sellers, on
the other hand, will keep on defending the level with a defined risk above it
to position for a drop into the 1972 level.

Upcoming Events

Today we will see the latest US Jobless Claims
figures and the US Retail Sales data, while tomorrow we conclude the week with
the US PPI and the University of Michigan Consumer Sentiment survey. Strong
data is likely to weigh on Gold, while weak figures should give it a boost.

See the video below