Gold Technical Analysis

Gold has been consolidating below the 2400 level
since last week as the mix of geopolitical and macro drivers led to a
rangebound price action. In fact, on the geopolitical front, we still have some
fears of an Israeli retaliation against Iran, although they are slowly
dissipating due to the lack of a follow-through since Monday. On the macro
side, the real yields have risen notably in the past couple of weeks, which is
generally a negative driver for the Gold market. That was not the case this
time and it’s not yet clear if it’s just because of geopolitical fears or
something else. If it’s indeed just because of geopolitical fears, we might see
a quick drop at some point, so it will be important to monitor the technical
levels.

Gold Technical Analysis – Daily
Timeframe

On the daily chart, we can see that Gold got stuck
in a consolidation just beneath the 2400 level. From a risk management
perspective, the buyers will have a much better risk to reward setup around the
trendline where
they will also find the confluence of the
50% Fibonacci retracement level
and the red 21 moving average. The
sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets and target a bigger drop into the next trendline
around the 2100 level.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it led to pullbacks into the minor black trendline where
the buyers keep on leaning onto to position for new higher highs. If the price
were to break lower, the reversal would be confirmed, and the sellers will pile
in more aggressively to target a drop into the trendline around the 2300 level.


Gold Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have
a strong resistance zone
around the 2395 level where the price got rejected from several times since
last week. If the price were to get there again, the sellers will likely step
in again with a defined risk above it to position for a break below the
trendline with a better risk to reward setup. 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.

Upcoming Events

Today we have the last important report of the week,
that is the latest US Jobless Claims figures. Strong data is likely to weigh on
Gold, while weak figures should give it a boost.

See the video below

This article was written by FL Contributors at www.forexlive.com.


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