Gold Technical Analysis – Hawkish repricing in rates expectations weighs on the market

Fundamental Overview

Gold extended the losses this week as the bearish momentum heading into FOMC increased following strong US data. In fact, we saw some more hawkish repricing in interest rates expectations and as mentioned here many times, such repricing is negative for the market.

Zooming out we are still in a range, but the upside is limited due to the lack of bullish catalysts and the pressure from the hawkish repricing in expectations. Tomorrow, we have the US NFP report and it’s going to be an important one. Soft data will likely give gold a boost, but strong figures could increase the bearish momentum further.

In the bigger picture, gold should remain in an uptrend as real yields will likely continue to fall amid Fed easing. But further hawkish repricing in interest rates expectations will likely keep on triggering corrections in the short term.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold extended the losses and it’s now approaching a key support around the 3,245 level. That’s where we can expect the buyers to step in with a defined risk below the support to position for a rally back into the resistance. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 3,120 level next.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a downward trendline defining the bearish momentum. The sellers will likely continue to lean on the trendline with a defined risk above it to keep pushing into new lows. The buyers, on the other hand, will look for a break higher to target the 3,333 swing point and upon a breakout, extend the rally into the 3,438 resistance next.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much else we can see here as the sellers will look for a rejection around the trendline, while the buyers will target a breakout. The red lines define the average daily range for today.

Upcoming Catalysts

Today we get the US PCE price index, the US Jobless Claims and the US Employment Cost Index. Tomorrow, we conclude the week with the US NFP report and the US ISM Manufacturing PMI.

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