Fundamental
Overview
Gold continues to trade in
a tight range as the market awaits the key catalysts this week. As a reminder,
the Fed is now very focused on the labour market as Fed Chair Powell said that
they will not welcome any more weakness and will do everything they can to keep
it strong.
Therefore, the NFP report
on Friday will decide whether the central bank will go with a standard 25 bps
cut in September or take a more aggressive approach with a 50 bps cut. Before
that, we will get other important releases like the ISM Manufacturing PMI tomorrow
which last month triggered the “growth scare”.
In the bigger picture, gold
should remain supported as real yields fall due to the Fed’s rate cut cycle,
but in the short-term, strong US data might weighed on the market a bit.
Gold
Technical Analysis – Daily Timeframe
Gold Daily
On the daily chart, we can
see that gold got stuck in a tight range as the lack of catalysts kept the
market at bay. Nonetheless, the buyers remain in control for now and they will
keep targeting new all-time highs. The sellers, on the other hand, will want to
see the price falling back below the 2480 level to turn the bias more bearish
and position for a drop into the 2430 level next.
Gold Technical Analysis
– 4 hour Timeframe
Gold 4 hour
On the 4 hour chart, we can
see more clearly the range between the 2480 support
and the 2530 resistance. The market participants will likely keep on “playing
the range” by buying at support and selling at resistance until we get a
breakout on either side.
Gold Technical Analysis
– 1 hour Timeframe
Gold 1 hour
On the 1 hour chart, we can
see the choppy price action of the last two weeks. There’s not much to do here
other than waiting for a breakout. The red lines define the average daily range for today and given the lack of
catalysts and the US holiday we shouldn’t expect any breakout today.
Upcoming
Catalysts
Tomorrow we have the US ISM Manufacturing PMI. On Wednesday, we have the US Job
Openings. On Thursday, we get the US Jobless Claims figures and the ISM Services
PMI. Finally, on Friday, we conclude the week with the US NFP report.