Fundamental Overview
Gold continues to push into new highs as the softer US inflation data last week led to a fall in Treasury yields and weakened the US Dollar. The latest rally was triggered by Trump’s threats of tariffs on Canada and Mexico.
It seems like the uncertainty around tariffs and potentially higher inflationary pressures is giving gold a boost as a safe haven, although it doesn’t sound like a strong reason for more upside. We’ve also got some key technical breakouts which might have seen momentum traders overextending the rally.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold managed to break above the key 2721
resistance yesterday and extended the gains as the buyers piled in more aggressively to target a new all-time high. The sellers will need the price to fall back below the 2721 level to regain control and position for a drop back into the 2600 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward
trendline defining the current bullish momentum. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking below the trendline to increase the bearish bets into the 2660 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum on this timeframe. The buyers will likely continue to lean on the trendline to keep pushing into new highs, while the sellers will look for a break lower to position for a drop back into the 2721 level. The red lines define the
average daily range for today.
Upcoming Catalysts
Tomorrow, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the Flash US PMIs.
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This article was written by Giuseppe Dellamotta at
www.forexlive.com.
