Gold Technical Analysis – The market remains rangebound

Fundamental Overview

Gold continues to pull back from the highs reached after the first Israel attack against Iran despite renewed tensions over the weekend following US strikes.

It looks like the market continues to bet on de-escalation, which is also what transpires from the crude oil market which remains rangebound. Traders continue to monitor the Strait of Hormuz where disruptions could take oil prices much higher. As of now, there are no disruptions.

In the bigger picture, gold remains in an uptrend as real yields will likely continue to fall amid Fed easing and just a hawkish repricing in rate cuts expectations could trigger corrections in the short term.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold continues to edge lower towards the major trendline despite increased tensions in the Middle East after the US strikes over the weekend. From a risk management perspective, the buyers will have a much better risk to reward setup around the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 3120 level next.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see the choppy price action of the last few days and the positive opening gap today that got erased throughout the Asian session. There’s not much else we can glean from this timeframe, so we need to zoom in to see some more details.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the price has been bottoming out around the 3345 zone. This process formed what looks like an inverted head and shoulders pattern, so we can expect the buyers to step in around these levels with a defined risk below the zone to position for a rally into a new all-time high.

The sellers, on the other hand, will look for a break to the downside to invalidate the bullish setup and pile in for a drop into the major upward trendline. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we get the US Flash PMIs. Tomorrow, we have the US Consumer Confidence report and Fed Chair Powell Testimony. On Thursday, we get the latest US Jobless Claims figures and the Final US Q1 GDP report. On Friday, we conclude the week with the US PCE price index and the Final University of Michigan Consumer Sentiment report.

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