Gold Technical Analysis – Renewed trade tensions lift the market

Fundamental Overview

In the final part of last week, the trade tensions returned as Trump accused China of violating their agreement. We also saw a general step up in Trump’s hawkish rhetoric on tariffs with the President announcing an increase to 50% on steel tariffs starting tomorrow. Maybe being called TACO made him mad.

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 the repricing in rate cuts expectations could weigh on gold, so watch out for the economic data, especially the NFP and CPI reports.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold broke above the downward trendline and opened the door for a move into new highs. The buyers piled in on the break to target the 3438 level next. The sellers, on the other hand, might want to wait for the price to come into the 3438 level to position for a drop back into the major upward trendline.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more clearly the breakout and the stronger bullish momentum. From a risk management perspective, if we get a pullback, the buyers will have a better risk to reward setup around the minor upward trendline to position for a rally into the 3438 level. The sellers, on the other hand, will want to see the price breaking lower to start targeting the 3200 level next.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a nice support zone around the 3330 level. If the price gets there, we can expect the buyers to step in with a defined risk below the support to position for a rally into new highs. The sellers, on the other hand, will look for a break lower to extend the pullback into the minor upward trendline. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we get the US Job Openings data. Tomorrow, we have the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.

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