Fundamental
Overview
Gold pulled back yesterday
which is something we also saw in other markets with the US dollar strengthening.
This could be hedging activity into CPI as there was no fundamental driver.
The US CPI and Fedspeak
after that, will shape markets expectations heading into the Jackson Hole Symposium
where Fed Chair Powell could open the door for a rate cut in September.
In case the data comes out
lower than expected, the market will likely reinforce the dovish bets and might
even price in higher changes of a third cut by year-end.
On the other hand, higher
than expected figures will likely trigger a hawkish repricing weighing on gold
and keeping us in the range.
In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
Fed easing. But hawkish repricing in interest rates expectations will likely
keep on triggering corrections in the short term.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold has been climbing steadily into the key 3,438 resistance but experienced a pullback
yesterday. Overall, we still have a rangebound market and from a risk
management perspective, the sellers would be better off shorting around the
resistance, while the buyers would have a better risk to reward setup around
the 3,245 support.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see that we don’t really have clear levels where to lean onto other than the zone
around the 3,340 level where yesterday’s bearish momentum waned. This is where
we can expect the buyers to step in with a defined risk below the zone to
position for a rally into the 3,438 resistance. The sellers, on the other hand,
will look for a break lower to increase the bearish bets into the 3,245
support.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, there’s
not much else we can add here although it’s worth noting that we have the US
CPI report today so the technicals might not mean much and it would be better
to trade after the release. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US CPI report. On
Thursday, we get the US PPI and the US Jobless Claims figures. On Friday, we
conclude the week with the US Retail Sales and the University of Michigan
Consumer Sentiment report. Focus also on Fedspeak, especially after the US CPI
data.