FUNDAMENTAL
OVERVIEW
Gold briefly spiked to the upside on Friday following the softer than
expected NFP
report, but the gains were quickly faded. There wasn’t any bearish catalyst
for the downside move, it’s just that the NFP report didn’t matter that much in
the bigger picture.
In fact, one soft NFP doesn’t change the series of very strong US data
and the US-Iran stalemate. The only thing we got out of it is an even lower
probability of a Fed rate hike in October. Those probabilities, though, could
still rise if the US CPI next week surprises to the upside.
This week, we don’t have anything on the agenda, so the focus will likely
be on US-Iran developments, and the price action could remain mostly rangebound.
If we get a breakthrough in US-Iran negotiations, then we can expect oil
prices to drop significantly and give gold a boost on lower rate hike
expectations. Another escalation, on the other hand, will likely send crude oil
higher and weigh on the precious metal.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold(CFD contract) couldn’t extend
the pullback all the way to the trendline as the price reversed earlier. The
natural target for the sellers should be the 3,885 level where we have also the
confluence of a major upward trendline. If the price gets there, we can expect
the buyers to step in, with a defined risk below the trendline, to position for
a rally into new record highs. The sellers, on the other hand, will look for a
break lower to increase the bearish bets into the 3,500 level next.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we can
see that the recent price action has been very choppy. If we get another pullback
into the trendline, we can expect the sellers to lean on it, with a defined
risk above it, to keep pushing into the 3,885 level. The buyers, on the other
hand, will want to see the price breaking higher to pile in for a rally into
the 4,700 level next, with the 4,400 level as the first target.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can glean from this timeframe given the choppy price action, but we
do have a minor resistance zone around the 4,165 level. If the price gets
there, we can expect the sellers to step in with a defined risk above it to
position for a drop into new lows. The buyers, on the other hand, will look for
a break higher to target a pullback into the trendline. The red lines define
the average daily range for today.
UPCOMING CATALYSTS
Todaywe get
the US ISM Services PMI. On Wednesday, we have the FOMC meeting minutes. On Thursday,
we get the latest US Jobless Claims figures. On Friday, we conclude the week
with the University of Michigan Consumer Sentiment survey.
This article was written by Giuseppe Dellamotta at investinglive.com.