Gold Technical Analysis – Positive trade talks weigh on the precious metal

Fundamental Overview

Gold ended the last week negatively, as first the positive expectations for the US-UK trade deal, and then for the US-China talks over the weekend, weighed on the precious metal.

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 positive news on the trade front or a hawkish Fed could trigger more downside for gold as the market prices out stagflationary fears.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold continues to pull back amid the positive news on the trade front. From a risk management perspective, the buyers will have a better risk to reward setup around the major trendline, while the sellers will look for a break lower to increase the bearish bets into the 2957 level next.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see the price fell all the way back to the key support around the 3258 level. This is where we can expect the buyers to step in with a defined risk below the level to position for a rally back into the 3367 resistance. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the major trendline next.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor downward trendline now defining the current pullback. If the price gets there, we can expect the sellers to lean on the trendline with a defined risk above it to position for further downside. The buyers, on the other hand, will look for a break higher to increase the bullish bets into new highs. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we get the US-China trade talks briefing. Tomorrow, we have the US CPI report. On Thursday, we get the latest US Jobless Claims figures, the US PPI and the US Retail Sales data. On Friday, we conclude the week with the University of Michigan Consumer Sentiment report.

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