Gold is looking for another all-time high ahead of the FOMC decision | investingLive

Fundamental
Overview

Gold remained supported
yesterday following an in-line US
CPI report and surprisingly weak initial jobless
claims. The jobless claims data stole the show as initial claims jumped to
a new cycle high and the highest level since 2021.

On further analysis, the
claims data might have been just a blip as it was hugely impacted by Texas
alone where there was an unusual spike. Nevertheless, the market liked the soft
data as it kept the weakening labour market narrative strong and therefore high
chances of a more dovish Fed.

In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
the Fed’s dovish reaction function. In the short-term though, hawkish repricing
in interest rates expectations will likely keep on triggering corrections.

Gold
Technical Analysis – Daily Timeframe

Gold Daily

On the daily chart, we can
see that the momentum stalled recently as we approach the FOMC policy decision.
From a risk management perspective, the buyers will have a better risk to
reward setup around the major trendline at the 3,400 level, while the
sellers will look for a break lower to extend the drop into the 3,120 level
next.

Gold Technical Analysis
– 4 hour Timeframe

Gold 4 hour

On the 4 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum. If we
get a pullback into the trendline, we can expect the buyers to lean on it with
a defined risk below it to keep pushing into new highs. The sellers, on the
other hand, will look for a break lower to increase the bearish bets into the major
trendline around the 3,400 level.

Gold Technical Analysis
– 1 hour Timeframe

Gold 1 hour

On the 1 hour chart, we can
see that the price got rejected by the most recent swing high at the 3,657
level and we have also a minor trendline defining the momentum on this timeframe.
The buyers will likely lean on the trendline to target a breakout to the
upside, while the sellers will look for a break lower to position for a
pullback into the next trendline around the 3,590 level. The red lines define the
average daily range for today.