Gold Technical Analysis – Awaiting the next catalyst

Fundamental Overview

Gold came under pressure last Friday following the weak US Retail Sales data. That reaction seemed wrong-footed given that it should actually support gold due to falling real yields. Moreover, Retail Sales are volatile so one negative month doesn’t change anything.

Sure enough, the market eventually started to erase the losses with the price now getting near the levels seen before the Retail Sales report. Today, we have the US-Russia talks in Saudi Arabia and positive headlines might weigh a bit on gold.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold continues to consolidate near the recent highs. From a risk management perspective, the buyers will have a better risk to reward setup around the 2790 level, while the sellers will look for a break below the level to start targeting the 2600 level next.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we the major upward trendline defining the bullish momentum. If we get a pullback into the trendline, we can expect the buyers to lean on it to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.

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 on this timeframe. The buyers will likely lean on the trendline to position for a rally into new highs, while the sellers will look for a break lower to increase the bearish bets into the major trendline. The red lines define the average daily range for today

Upcoming Catalysts

Today we have the US-Russia talks in Saudi Arabia. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US Flash PMIs.

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