FUNDAMENTAL
OVERVIEW
Gold started to consolidate above the 4,140 level after Fed’s Williams and
Fed’s Jefferson delivered dovish comments suggesting no urgency in raising
interest rates again in October.
This shows once again that the Fed has low appetite for tightening,
which is what transpired from the September’s dot plot. This could also support
gold if the Fed keeps being more dovish than market’s expectations as real
yields would fall on inflation expectations rising faster than nominal yields.
Today, we have the US NFP report on the agenda. Given Fed’s Williams and
Fed’s Jefferson comments, we will likely need a blockbuster report, with data
beating expectations across the board, to raise the probabilities for an October
hike again. Such an outcome could weigh on gold in the short-term on another
hawkish repricing.
In-line or weaker than expected data, on the other hand, will likely
provide support to extend the recent pullback.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see gold(CFD contract) is slowly
approaching the downward trendline. We can expect the sellers to lean on the
trendline, with a defined risk above it, to position for a drop 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.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, there’s
not much we can glean from this timeframe as the sellers will have a better
risk to reward setup around the trendline and the 4,240 resistance, while the
buyers will need a break higher to open the door for new highs, with the 4,400
level as the first target.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, we have
a minor support around the 4,140 level where the price got rejected from
several times in the past few days. If we get another pullback, we can expect
the buyers to step in around the support, with a defined risk below it, to keep
targeting the downward trendline. The sellers, on the other hand, will look for
a break to increase the bearish bets into the 3,885 level next. The red lines
define the average daily range for today.
UPCOMING CATALYSTS
Todaywe
conclude the week with the US NFP report.
This article was written by Giuseppe Dellamotta at investinglive.com.