FUNDAMENTAL
OVERVIEW
Gold fell to a new two-month low this week as the lack of tangible progress
on the US-Iran side and the hawkish Fed risks continue to weigh on the precious
metal.
Despite the expectations for an imminent deal and the reopening of the
Strait of Hormuz, we still haven’t got anything officially. There’s just been
lots of noise. Moreover, in the past few days, the US and Iran exchanged limited
military strikes, but the US side continues to say that the ceasefire remains
intact.
On the Federal Reserve side, more and more policymakers are now pushing for
dropping the easing bias, so we can expect that to happen at the June FOMC
meeting. Moreover, if nothing changes on the US-Iran side before then, we might
get a hawkish surprise as inflation continues to run hot and the US data
remains resilient.
In the short-term, a resolution and the reopening of the Strait will likely
support gold on falling oil prices and increased rate cut bets. But if the
Strait remains closed for longer and oil prices stay elevated, the risk of the
Fed being forced to hike anyway increases.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
Gold – daily
On the daily chart, we can
see that gold dropped to a new two-month low this week and it’s approaching the
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
the major downward trendline. The sellers, on the other hand, will look for a
break to increase the bearish bets into the 3,885 level next.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
Gold – 4 hour
On the 4 hour chart, we can
see the price almost reached the key 4,350 level. We can expect the buyers to
step in there with a defined risk below the level to position for a pullback
into the downward trendline. The sellers, on the other hand, will look for a
break to increase the bearish bets into the major upward trendline.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
Gold – 1 hour
On the 1 hour chart, we
have another minor downward trendline defining the bearish momentum on this
timeframe. The sellers will likely continue to lean on the trendline with a
defined risk above it to keep pushing into new lows, while the buyers will look
for a break above the trendline to extend the pullback into the next trendline.
The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we get the latest
US Jobless Claims figures and the US PCE price index.