The war
in Israel has given Gold a boost as the precious metal managed to sustain a
rally after the upward gap following the outbreak of the war. The real yields
and the US Dollar though continue to march higher and that might weigh on Gold
especially at these key levels. The US data remains solid, but core inflation
continues on the right path which might be another headwind for Gold as the
Fed’s higher for longer stance coupled with normalising inflation raises real
yields.
Gold Technical Analysis
– Daily Timeframe
Gold Daily
On the daily chart, we can see that Gold has
reached a key resistance zone
around the 1880 level where we can find the confluence with the
previous support turned resistance, the red
21 moving average and the
50% Fibonacci retracement level.
The sellers are likely to step in here with a defined risk above the level to
position for another selloff into the lows. The buyers, on the other hand, will
want to see the price breaking higher to target the downward trendline first
and eventually a breakout.
Gold Technical Analysis – 4
hour Timeframe
Gold 4 hour
On the 4 hour chart, we can see that the price has
already reacted to the resistance zone and fell into the previous swing level
before bouncing back up as the buyers stepped in at the red 21 moving average
and the support level. If the price falls further and breaks the 1865 support
zone, the sellers will have a confirmation of a change in trend and will pile
in even more aggressively to extend the drop into the lows.
Gold Technical Analysis – 1
hour Timeframe
Gold 1 hour
On the 1 hour chart, we can see that the
whole rally into the resistance zone was diverging with
the MACD. This
is generally a sign of weakening momentum often followed by pullbacks or
reversals. This is adding another layer of confluence for the sellers and
increases the chances of a selloff from these levels. If we see another spike
higher into the resistance zone, the divergence would become even stronger.
Upcoming Events
Today the only notable event on the agenda is the
University of Michigan Consumer Sentiment report although it has lost its
market moving ability lately. Only big surprises are likely to have an impact
on the market.
See the video below
