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Fundamental
Overview
Gold is pulling back a bit now
after an almost 8% selloff since the US election day. The market didn’t react
hawkishly after another hot US
PPI report and an acknowledgement from Fed
Chair Powell that they can proceed carefully on rate cuts.
The market might be fine with
just two rate cuts priced in for 2025 and will need some stronger reasons to
price out those as well. For now, the correction looks to be losing steam and
might even be over.
In the bigger picture, gold
remains in a bullish trend as real yields will likely continue to fall amid the
Fed’s easing cycle, but the short-term corrections will be triggered by a repricing
in rate cuts expectations.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold broke through the key trendline around the 2600 level and extended
the drop into the 2536 level. If we get a bigger pullback, the sellers will
likely step in around the broken trendline and the swing low level at 2600. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into a new all-time high.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that we have a downward trendline defining the current bearish momentum.
The sellers will likely lean on it to position for new lows, while the buyers
will look for a break higher to increase the bullish bets into the 2600 level.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, there’s
not much else we can add here as the sellers will look for a rejection around
the trendline and the buyers will look for a break to the upside. The red lines
define the average daily range for today.
Upcoming
Catalysts
Today, we conclude the week with the US Retail Sales data.