Gold Technical Analysis – Focus on the FOMC decision

Fundamental Overview

Gold erased last week’s losses in just a couple of days. It’s unclear what was the catalyst though. I can cite the usual “dollar weakness, safe haven demand” reasons but those don’t help with market timing.

The most plausible explanation could be the recent volatility in some Asian currencies which would explain the timing and the safe haven demand. Authorities are now intervening so we could see an ease in the safe haven demand.

We have also the FOMC decision tomorrow and that could be a risk for the bulls as the Fed is likely to push back against the aggressively dovish market pricing.

In the bigger picture, gold remains in an uptrend as real yields will likely continue to fall amid Fed easing. But in the short-term more positive news on the tariffs front and a hawkish Fed could trigger more downside for gold as the market readjusts to new conditions.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold bounced around the 3200 level and pulled all the way back to the key swing level at 3370. From a risk management perspective, the buyers will have a better risk to reward setup around the major trendline, while the sellers will look for a break lower to increase the bearish bets into the 2957 level next.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see the price recently broke below the 3258 support but eventually climbed back above it and extended the rally into the key swing point around the 3370 level. This is where we can expect the sellers to step in with a defined risk above the high to position for a drop into the major trendline. The buyers, on the other hand, will want to see the price breaking into a new high to increase the bullish bets into a new all-time high.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor upward trendline defining the bullish momentum. 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 target a drop back into the 3258 level. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have the Trump-Carney meeting. Tomorrow, we have the FOMC Rate Decision, while on Thursday, we get the latest US Jobless Claims figures.

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