Basic overview
Gold felt pressure from rising real yields in the latter part of May which led to it falling and consolidating around the 2340 level. More recently, data has shown that the inflation panic of the first part of the year appears to be in the rearview mirror, and thus real yields have declined. Which gave a boost to gold prices.
There is no strong case to go higher or short at the moment, but the bias has shifted to the upside a bit, though. Tomorrow's very hot NFP report could lead to another decline, but if there are no clear signs of inflationary pressures through wages, the market may eventually erase the losses. On the contrary, a weak report would give the market another boost and take us to a new all-time high faster.
Technical analysis of gold – daily time frame
Daily gold
On the daily chart, we can see that gold has consolidated around the 2340 level and got a boost recently as the data gave more confidence to the market that inflation fears may be behind us.
From a risk management perspective, buyers will have a better risk to reward setup around the 2277 support level where we can also find the 38.2% Fibonacci retracement level to converge. On the other hand, sellers will want to see the price break down to increase bearish bets on the key trend line around the 2150 level.
Technical analysis of gold – 4 hour time frame
Gold 4 hours
On the 4-hour chart, we can see more clearly the consolidation around the 2340 level. Yesterday the price broke above the swing high at 2364, which should have shifted the technical bias more to the upside.
This is where we can expect buyers with below-par specific risks to step in to increase bullish bets to a new all-time high. Sellers, on the other hand, will want to see the price break below the level to build up and aim for a decline back to the recent lows.
Technical analysis of gold – 1 hour time frame
Gold 1 hour
On the hourly chart, we can see that if the price falls below the 2364 level, buyers will find support around the 2350 level where we can find the intersection of the swing level, the minor trend line and the 50% Fibonacci retracement level. .
Sellers, on the other hand, will want to see the price break down to increase bearish bets to the lows and target a breakout to new lows. The red lines mark the average daily range for the day.
Upcoming stimuli
Today we'll get the latest US unemployment claims numbers, while we wrap up the week tomorrow with the US Nonfarm Payrolls report.