Gold Technical Analysis – The US PPI saves the day

Fundamental Overview

Yesterday, the US PPI report came in higher than expected but the focus was on the details that feed into the Core PCE index, which is what the Fed focuses on. Those details were all very soft and helped to bring the early estimates down to more benign levels.

In fact, the Core PCE Y/Y is now projected to fall to 2.6% vs. 2.8% prior. That’s good news for the Fed. Real yields and the US dollar fell as a result and provided a tailwind for gold to push into new highs.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold continues to remain supported and it’s now close to making another all-time high. 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 now have a minor upward trendline defining the current momentum. If we get a pullback into the trendline, we can expect the buyers to lean on it to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next trendline.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor support zone around the 2922 level. In case we get a pullback, we can expect the buyers to step in around the support to position for the rally into a new all-time high. The sellers, on the other hand, will look for a break lower to extend the pullback into the next support around the 2910 level. The red lines define the average daily range for today

Upcoming Catalysts

Today, we conclude the week with the US Retail Sales data.

Watch the video below