Gold Technical Analysis – The stagflationary risk continues to be priced out

Fundamental Overview

Gold continues to correct lower as the market unwinds some of the stagflationary risk that was priced in in the past months. The de-escalation trend will likely remain intact until the first trade deal.

The stagflationary pricing is what got gold to such high prices, and as we start to price out that risk, it’s normal to see a correction, especially considering that “long gold” has been the most crowded trade.

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 should see 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 broke out of the recent range to the downside as the market continues to reprice the stagflationary risks. From a risk management perspective, the buyers will have a better risk to reward setup around the previous high at 3167 to position for further upside, while the sellers will look for a break lower to increase the bearish bets into the major trendline around the 3100 level.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more clearly the breakout of the range between the 3258 support and the 3367 resistance. We now have a downward trendline defining the bearish momentum. The sellers will likely step in around the broken support and the trendline to position for further downside, while the buyers will want to see the price breaking higher to target the 3367 level next.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much else we can add here as the sellers will likely step in both at the broken support and the trendline, while the buyers will pile in at every break higher. The red lines define the average daily range for today.

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Today we get the latest US Jobless Claims figures and the US ISM Manufacturing PMI. Tomorrow, we conclude the week with the US NFP report.