Gold Technical Analysis – The stock market bounce set gold free | Forexlive
Fundamental
Overview
As the stock markets around
the world bottomed (at least for now), the pressure on gold finally waned and
the precious metal rallied strongly into a new all-time high.
Gold generally feels the
pressure from aggressive stock market selloffs as it tightens financial
conditions and there’s a popular narrative that gold positions get liquidated
to cover margins.
Not sure about the latter,
but as the stock market bottomed, gold finally started to rise again and eventually
extended into new all-time highs.
In the bigger picture, gold
remains in an uptrend as real yields will likely continue to fall amid fiscal
stimuli and rising inflation expectations. The risks include another aggressive
stock market selloff and a hawkish Fed.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that Gold rallied into a new all-time high as the pressure from the stock
market waned. There’s not much we can glean from this timeframe as we are
trading in uncharted territory, so we need to zoom in to see some more details.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that the previous all-time high at 3168 could now act as support.
That’s where the buyers will likely step in with a defined risk below the level
to position for further upside. The sellers, on the other hand, will want to
see the price breaking lower to pile in and target a pullback into the 3057
level next.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see that we also have an upward trendline adding confluence to the support
level. Again, the buyers will likely step in there to keep pushing into new highs,
while the sellers will look for a break lower to target the 3057 level next. The
red lines define the average daily range for today.
Upcoming
Catalysts
Today we conclude the week with the US PPI
and the University of Michigan Consumer Sentiment survey, but the focus will
remain on tariffs negotiations and China.