Gold finally erased gains from geopolitical events between Israel and Iran and found support around a key trendline. The price has started to consolidate as the market waits for a new catalyst to push it in one direction or the other. This week has been rather empty on the data front and there has been no speech from the Fed as the FOMC is in a blackout period. However, we received the latest US PMIs and they generally missed expectations with worrying comments on the labor market. Interestingly, this didn’t trigger a rally for gold, so the market may want to see more data before trusting the PMIs.
Gold Technical Analysis – Daily Timeline
Daily Gold
On the daily chart we can see that gold has finally moved back into the key trendline where we can also find the red moving average 21 for the confluence. This is where we can expect buyers to pile in with defined risk below the trendline to position themselves for a rally to a new all-time high. Sellers, on the other hand, will want to see the price fall to increase bearish bets on the next major trendline around the 2150 level.
Gold Technical Analysis – 4 Hour Time Frame
Gold 4 hours
On the 4-hour chart we can see that the price has remained stuck in some consolidation around the trendline with strong resistance around the 2330 level where we can also find the red 21 moving average for the confluence. Sellers are clearly intervening around resistance with defined risk above to position themselves for a continuation of the downtrend. Buyers will need to break through resistance to invalidate the bearish setup and increase bullish bets to a new all-time high.
Gold Technical Analysis – 1 Hour Time Frame
Gold 1 hour
On the hourly chart we can take a closer look at the narrow range between support at 2310 and resistance at 2330. We can also see that we have a downtrend line adding a confluence to the resistance zone. A breakout higher will be significant and will likely trigger a stronger upward move. Conversely, a downside breakout should see bearish momentum intensify and push the market towards the next support around the 2150 level.
Events to come
Today we get first quarter US GDP and the latest US jobless claims numbers. Tomorrow we wrap up the week with the US PCE report. Strong data should weigh on gold, while weak numbers should give it a boost.
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