Gold Technical Analysis – Hawkish repricing in rates expectations weighs on the market | investingLive

Fundamental
Overview

Gold extended the losses this
week as the bearish momentum heading into FOMC increased following strong US
data. In fact, we saw some more hawkish repricing in interest rates
expectations and as mentioned here many times, such repricing is negative for the
market.

Zooming out we are still in
a range, but the upside is limited due to the lack of bullish catalysts and the
pressure from the hawkish repricing in expectations. Tomorrow, we have the US
NFP report and it’s going to be an important one. Soft data will likely give gold
a boost, but strong figures could increase the bearish momentum further.

In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
Fed easing. But further hawkish repricing in interest rates expectations will likely
keep on triggering corrections in the short term.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that gold extended the losses and it’s now approaching a key support
around the 3,245 level. That’s where we can expect the buyers to step in with a
defined risk below the support to position for a rally back into the
resistance. The sellers, on the other hand, will look for a break lower to increase
the bearish bets into the 3,120 level next.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that we have a downward trendline
defining the bearish momentum. The sellers will likely continue to lean on the
trendline with a defined risk above it to keep pushing into new lows. The
buyers, on the other hand, will look for a break higher to target the 3,333 swing
point and upon a breakout, extend the rally into the 3,438 resistance next.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can see here as the sellers will look for a rejection around
the trendline, while the buyers will target a breakout. The red lines define the
average daily range for today.

Upcoming
Catalysts

Today we get the US PCE price index, the
US Jobless Claims and the US Employment Cost Index. Tomorrow, we conclude the
week with the US NFP report and the US ISM Manufacturing PMI.

Watch the video below