FUNDAMENTAL
OVERVIEW
Gold opened the week higher following some positive
developments over the weekend. The US halted its strikes after 13 days of
attacks and Iran said it will maintain a ceasefire so long as the US remains on
pause.
This has led to some optimism as traders took this
latest development as an early sign of a potential de-escalation. It goes
without saying that the price action will continue to be driven by US-Iran
headlines.
Gold will likely remain supported amid the
de-escalation expectations, but traders will keep a close eye on the headlines
as things can re-escalate quickly with just a single Trump’s post.
Looking ahead, we have the FOMC rate decision on
Wednesday which is going to be one of the most important events of the week.
The Fed is expected to hold interest rates steady following the soft US
inflation data.
Fed Chair Warsh is unlikely to provide much forward
guidance, so the economic data will continue to be the deciding factor for
September and the following meetings.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold is testing the major downward trendline once again. We can expect
the sellers to lean on the trendline with a defined risk above it to keep
pushing into new lows. The buyers, on the other hand, will want to see the
price breaking higher to pile in for a rally into the next trendline around the
4,500 level.
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 upward trendline defining the current bullish momentum. The buyers will
likely continue to lean on the trendline with a defined risk below it to keep
pushing into new highs. The sellers, on the other hand, will look for a break
to increase the bearish bets into new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow, we get the US
Consumer Confidence report. On Wednesday, we have the FOMC rate decision. On
Thursday, we get the US PCE price index, the Advance Q2 GDP and the Jobless
Claims figures. On Friday, we conclude the week with the US Q2 Employment Cost
Index.
This article was written by Giuseppe Dellamotta at investinglive.com.