Gold Technical Analysis – We continue to price out the stagflationary risk

Fundamental Overview

Gold continues to pull back amid the positive global growth expectations following the much better than expected US-China news on Monday. These expectations are also leading to a more hawkish repricing in interest rates and the pricing out of stagflationary risk.

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 will likely keep a lid on gold upside.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold continues to pull back amid the positive sentiment 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 below the key support around the 3258 level and after a retest, continued lower. The sellers will keep on pushing towards the major trendline, while the buyers will want to see the price rising back above the 3258 level to start targeting the 3367 level next.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor downward trendline defining the bearish momentum. The sellers will likely continue to lean on the trendline to keep pushing into new lows, while the buyers will look for a break higher to pile in for a rally back into the 3367 level. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have Fed’s Waller speaking. Tomorrow, 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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