Basic overview
Gold has recovered most of the losses from Monday’s global stock market slump as the ISM services PMI and especially the US unemployment figures yesterday improved risk sentiment. This could just be a repeat of Monday’s liquidations as it does not look like there are strong reasons for a recovery in the near term.
In fact, the market may be pricing out some of the aggressive rate cut expectations, which could put pressure on gold in the short term. This could lead to overall volatile price action, but in the long term, the bullish case for gold remains, as the Fed will cut rates anyway.
Gold Technical Analysis – Daily Timeframe
GoldDaily
On the daily chart, we can see that gold finally bounced around the 2360 support zone and extended gains to the 2430 resistance. Buyers will want to see the price break out to the upside to increase bullish bets on a new all-time high. Sellers, on the other hand, will likely lean on the resistance with a defined risk above it to position for a drop to the 2360 support.
Gold Technical Analysis – 4-hour time frame
Gold 4 hours
On the 4-hour chart, we can see that the price broke the downtrend line and continued the rally to the resistance at 2430 as buyers stepped in with more conviction. Not much more can be deduced from this time frame as the price remains trapped in a range between the support at 2360 and the resistance at 2483.
Gold Technical Analysis – 1-Hour Timeframe
Gold 1 hour
On the 1-hour chart, we can see that we have an interesting zone around the 2410 level, from which the price has been rejected several times in the past few days. Here we can expect the buyers to enter with a defined risk below the zone to position themselves for a break above the 2430 resistance and a subsequent rally to the 2483 high. The sellers, on the other hand, will want to see a price break to the downside to increase the bearish bets on the 2360 support. The red lines define the average daily range for today.
