Gold Technical Analysis | Forexlive

Gold has been under pressure recently as the
geopolitical risk premium started to fade with the markets now looking past the
Israel-Hamas conflict. The Fed speakers recently have also been pretty hawkish
which might have contributed to the correction. The US data though, has been
showing signs of softening, especially on the labour market side with the NFP report
missing expectations across the board and Continuing Claims rising
steadily. These should be bullish signs for Gold going forward because it’s
likely to bring rate cuts forward.

Gold Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Gold couldn’t
sustain the breakout above the key 1985 resistance and
erased a third of its gains since the outbreak of Israel-Hamas war. The bias is
now turning bearish as the price last Friday fell below a strong support and
the moving averages crossed
to the downside. The buyers will need to sustain the bounce on the 38.2% Fibonacci retracement level
and take the price back above the 1950 level to invalidate the bearish setup.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that we have a divergence with the
MACD, which
is generally a sing of weakening momentum often followed by pullbacks or
reversals. In this case, we might see a pullback into the broken support turned resistance where we
can also find the confluence with the
trendline, the
38.2% Fibonacci retracement level and the red 21 moving average. This is where
the sellers are likely to step in with a defined risk above the resistance to
position for a drop into the 1890 level.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see more
closely the bearish setup around the 1950 resistance. The buyers will want to
see the price breaking above the resistance to invalidate the bearish setup and
position for a rally back into the highs.

Upcoming Events

This week we have some top tier economic releases. We
begin tomorrow with the US CPI report which is going to be one of the most
important events of the week. On Wednesday, we have the US Retail Sales and PPI
data, while on Thursday we conclude with the latest US Jobless Claims figures.
Weak data is likely to support Gold, while strong readings should add to the
recent selling pressure.