FUNDAMENTAL
OVERVIEW
Gold opened the week slightly higher after Trump
called off the planned strikes on Iran claiming they reached the perimeters
of a deal that would include the immediate and complete opening of the Strait
of Hormuz. He added that this ceasefire is subject to being able to make a deal
rapidly, with negotiations starting today.
The good news is that Trump continues to follow the same old “escalate to
de-escalate” strategy. The bad news is that Iran denied Trump’s claims and confirmed
that the strait remains closed because of US attacks. This has limited the
upside in gold.
Overall, the fundamentals haven’t changed much, so it’s just about waiting
for the US CPI and further US-Iran developments. A de-escalation would keep
supporting the market on easing inflationary worries and lower rate hike probabilities.
An escalation, on the other hand, would keep gold under pressure and potentially
take it to new lows.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold broke above the downward trendline but couldn’t extend the gains as
the price got stuck in a consolidation. The buyers will likely continue to step
in around these levels with a defined risk below the recent low around the
3,995 level to position for a rally into the next trendline around the 4,400
level. The sellers, on the other hand, will want to see the price falling below
the 3,995 level to extend the drop into the 3,885 level next.
GOLD
TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price action has been mostly rangebound since late June, and this
leaves traders with little to do other than waiting for technical breakouts or
fundamental catalysts. The buyers will need the price to break above the 4,200
resistance to gain more conviction for a reversal of the trend. The sellers, on
the other hand, will likely step in around the resistance with a defined risk
above it to position for a drop into the 3,885 level.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, we
have a minor resistance zone around the 4,120 level where the price got
rejected from several times in the past weeks. The sellers will likely step in
around the resistance with a defined risk above it to keep targeting new lows,
while the buyers will look for a break to increase the bullish bets into the
4,200 resistance. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we have the US ISM
Manufacturing PMI. Tomorrow, we get the US Job Openings data. On Wednesday, we
have the US ADP and ISM Services PMI. On Thursday, we get the latest US Jobless
Claims figures. On Friday, we conclude the week with the US NFP report.
This article was written by Giuseppe Dellamotta at investinglive.com.