Gold Technical Analysis – Renewed tariffs fears boost prices

Fundamental
Overview

Gold found some support
from renewed tariffs fears and managed to pull back into the 2900 level. Real
yields continue to fall as nominal yields recently fell much faster than
inflation expectations. The culprit is likely Trump’s tariffs policy as it keeps
inflation expectations high while also depressing growth expectations.

The next NFP and CPI
reports will be key for the market. Hot data, especially on the inflation side,
will likely weigh on gold prices as the market might pare back its expectations
for rate cuts that recently saw an increase to 75 bps of easing by year-end
compared to 44 bps just last week.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that gold bounced around the 2832 level last Friday and extended the
pullback into the 2900 level on renewed tariffs fears. There’s not much we can
glean from this timeframe, so we need to zoom in to see some more details.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that the price broke above the downward trendline that was defining the
pullback into the 2790 level. The buyers piled in on the break to position for
the rally back into the all-time highs. The sellers, on the other hand, will
likely step in around the all-time highs to target again the 2790 level.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can
see that we had a bit of a consolidation around the 2893 level but the price is
now breaking above the minor resistance
with the buyers increasing their bullish bets into the all-time highs. The
sellers will want to see the price breaking below the upward trendline to regain
conviction and position for a drop into the 2790 level next. The red lines define the average daily range for today

Upcoming
Catalysts

Today the market participants will be on
the lookout for tariffs headlines as they go into effect for Canada, Mexico and
China. Tomorrow, we have the US ADP and the US ISM Services PMI. On Thursday,
we get the latest US Jobless Claims figures. On Friday, we conclude the week
with the US NFP report.

Watch the video below

This article was written by Giuseppe Dellamotta at www.forexlive.com.