Gold prices are consolidating after a three-day rally, reaching a new record high above $2,480 in Asian trading on Wednesday. Buyers are pausing before potentially resuming the upward trend. The anticipation of a US Federal Reserve interest rate cut in September supports this bullish momentum, as a rate cut is now considered inevitable. The market is fully pricing in the September cut, with a 60% chance of another cut in December, according to CME Group's FedWatch Tool.
Recent data showed that US Retail Sales stagnated in June, down from a 0.3% increase in May. However, the retail sales control group rose to 0.9% in June from 0.4% previously, indicating economic resilience. Despite this, the market's expectation of a Fed rate cut remains unchanged, leading to a resumed downtrend in the US Dollar and aiding gold's rise to new highs above $2,450.
Comments from Fed Governor Adriana Kugler, along with dovish statements from other Fed policymakers, including Chairman Jerome Powell, have reinforced the bullish outlook for gold. Additionally, strong physical demand for gold in India has supported prices, despite their elevated levels. Analysts from the Australian and New Zealand Banking Group noted that higher prices have dampened demand somewhat, but consumer interest remains strong, with 2023 demand at 760 tons, only slightly down from the long-term average.
Looking ahead, the dovish sentiment surrounding the Fed's interest rate outlook is expected to continue bolstering gold's appeal. Potential economic stimulus from China could further support gold prices. Traders will watch upcoming US industrial and housing data, as well as a speech from Fed Governor Christopher Waller, for new trading cues.
On the technical front, gold's daily chart shows a bullish outlook, with the 14-day Relative Strength Index (RSI) near overbought levels and a bullish crossover of the 21-day Simple Moving Average (SMA) above the 50-day SMA. Gold buyers aim to break the $2,500 level, with the next resistance at $2,550. Any pullback could challenge the previous high of $2,450, with further support at $2,400, $2,371, and $2,350.
Let’s dive into a detailed top-down analysis of the gold market using the provided charts across multiple timeframes. This approach will help identify key support and resistance levels, fair value gaps, and potential trading setups.
Daily Chart Analysis
1. Overall Trend:
• The daily chart shows a strong uptrend since late 2023.
• Current price is around $2,475, approaching recent highs, indicating sustained bullish momentum.
2. Support and Resistance:
• Support Levels:
• $2,350 (previous resistance now turned support).
• $2,250 (significant swing low).
• $2,150 (major psychological level).
• Resistance Levels:
• $2,500 (psychological resistance).
• $2,525 (historical high).
3. Fair Value Gaps:
• Observed around $2,200 - $2,250, suggesting potential pullback zones.
4. Patterns:
• Bullish trend with higher highs and higher lows.
• Potential breakout above the weak high near $2,480.
4-Hour Chart Analysis
1. Trend Analysis:
• Confirmed uptrend with recent consolidation between $2,420 - $2,475.
• Bullish continuation pattern evident.
2. Support and Resistance:
• Support Levels:
• $2,420 (short-term support).
• $2,400 (key level for continuation).
• Resistance Levels:
• $2,480 (immediate resistance).
• $2,500 (key psychological level).
3. Fair Value Gaps:
• Notable gaps around $2,360 - $2,390, which could act as entry points on pullbacks.
4. Patterns:
• Continuation patterns suggest potential breakouts.
• Demand zones around $2,425 highlight strong buying interest.
1-Hour Chart Analysis
1. Trend Analysis:
• Detailed view of higher highs and higher lows.
• Short-term consolidation near $2,475.
2. Support and Resistance:
• Support Levels:
• $2,450 (short-term support).
• $2,425 (key level).
• Resistance Levels:
• $2,480 (immediate resistance).
• $2,500 (psychological resistance).
3. Fair Value Gaps:
• Gaps around $2,360 - $2,380 indicate potential pullbacks and entry opportunities.
4. Patterns:
• Multiple breaks of structure confirm bullish strength.
• Watch for pullbacks to $2,450 for potential long entries.
15-Minute Chart Analysis
1. Trend Analysis:
• Micro-trends within the 1-hour movements.
• Recent breakout potential from consolidation.
2. Support and Resistance:
• Support Levels:
• $2,465 (immediate support).
• $2,450 (short-term support).
• Resistance Levels:
• $2,475 (current resistance).
• $2,480 (immediate resistance).
3. Fair Value Gaps:
• Minor gaps around $2,460, indicating short-term interest areas.
4. Patterns:
• Intraday bullish flags and pennants.
• Breaks of structure confirming the micro uptrend.
Key Insights and Trading Plan
• Overall Bias: Bullish across all time frames.
• Key Levels to Watch:
• Support: $2,450, $2,425.
• Resistance: $2,480, $2,500.
• Fair Value Gaps: Around $2,350 - $2,380 and $2,420 - $2,425.
• Patterns: Look for breakouts from consolidation and continuation patterns near support zones.
Trading Strategy
1. Entries:
• Consider long entries on pullbacks to support levels ($2,450, $2,425) with stops below $2,400.
• Breakout trades above $2,480 targeting $2,500.
2. Stops and Risk Management:
• Use trailing stops to lock in profits.
• Maintain a risk-reward ratio of at least 1:2.
3. Monitoring:
• Watch for trend reversals or significant breaks of support levels.
• Continuously monitor lower timeframes for precise entries and exits.
Recent data showed that US Retail Sales stagnated in June, down from a 0.3% increase in May. However, the retail sales control group rose to 0.9% in June from 0.4% previously, indicating economic resilience. Despite this, the market's expectation of a Fed rate cut remains unchanged, leading to a resumed downtrend in the US Dollar and aiding gold's rise to new highs above $2,450.
Comments from Fed Governor Adriana Kugler, along with dovish statements from other Fed policymakers, including Chairman Jerome Powell, have reinforced the bullish outlook for gold. Additionally, strong physical demand for gold in India has supported prices, despite their elevated levels. Analysts from the Australian and New Zealand Banking Group noted that higher prices have dampened demand somewhat, but consumer interest remains strong, with 2023 demand at 760 tons, only slightly down from the long-term average.
Looking ahead, the dovish sentiment surrounding the Fed's interest rate outlook is expected to continue bolstering gold's appeal. Potential economic stimulus from China could further support gold prices. Traders will watch upcoming US industrial and housing data, as well as a speech from Fed Governor Christopher Waller, for new trading cues.
On the technical front, gold's daily chart shows a bullish outlook, with the 14-day Relative Strength Index (RSI) near overbought levels and a bullish crossover of the 21-day Simple Moving Average (SMA) above the 50-day SMA. Gold buyers aim to break the $2,500 level, with the next resistance at $2,550. Any pullback could challenge the previous high of $2,450, with further support at $2,400, $2,371, and $2,350.
Let’s dive into a detailed top-down analysis of the gold market using the provided charts across multiple timeframes. This approach will help identify key support and resistance levels, fair value gaps, and potential trading setups.
Daily Chart Analysis
1. Overall Trend:
• The daily chart shows a strong uptrend since late 2023.
• Current price is around $2,475, approaching recent highs, indicating sustained bullish momentum.
2. Support and Resistance:
• Support Levels:
• $2,350 (previous resistance now turned support).
• $2,250 (significant swing low).
• $2,150 (major psychological level).
• Resistance Levels:
• $2,500 (psychological resistance).
• $2,525 (historical high).
3. Fair Value Gaps:
• Observed around $2,200 - $2,250, suggesting potential pullback zones.
4. Patterns:
• Bullish trend with higher highs and higher lows.
• Potential breakout above the weak high near $2,480.
4-Hour Chart Analysis
1. Trend Analysis:
• Confirmed uptrend with recent consolidation between $2,420 - $2,475.
• Bullish continuation pattern evident.
2. Support and Resistance:
• Support Levels:
• $2,420 (short-term support).
• $2,400 (key level for continuation).
• Resistance Levels:
• $2,480 (immediate resistance).
• $2,500 (key psychological level).
3. Fair Value Gaps:
• Notable gaps around $2,360 - $2,390, which could act as entry points on pullbacks.
4. Patterns:
• Continuation patterns suggest potential breakouts.
• Demand zones around $2,425 highlight strong buying interest.
1-Hour Chart Analysis
1. Trend Analysis:
• Detailed view of higher highs and higher lows.
• Short-term consolidation near $2,475.
2. Support and Resistance:
• Support Levels:
• $2,450 (short-term support).
• $2,425 (key level).
• Resistance Levels:
• $2,480 (immediate resistance).
• $2,500 (psychological resistance).
3. Fair Value Gaps:
• Gaps around $2,360 - $2,380 indicate potential pullbacks and entry opportunities.
4. Patterns:
• Multiple breaks of structure confirm bullish strength.
• Watch for pullbacks to $2,450 for potential long entries.
15-Minute Chart Analysis
1. Trend Analysis:
• Micro-trends within the 1-hour movements.
• Recent breakout potential from consolidation.
2. Support and Resistance:
• Support Levels:
• $2,465 (immediate support).
• $2,450 (short-term support).
• Resistance Levels:
• $2,475 (current resistance).
• $2,480 (immediate resistance).
3. Fair Value Gaps:
• Minor gaps around $2,460, indicating short-term interest areas.
4. Patterns:
• Intraday bullish flags and pennants.
• Breaks of structure confirming the micro uptrend.
Key Insights and Trading Plan
• Overall Bias: Bullish across all time frames.
• Key Levels to Watch:
• Support: $2,450, $2,425.
• Resistance: $2,480, $2,500.
• Fair Value Gaps: Around $2,350 - $2,380 and $2,420 - $2,425.
• Patterns: Look for breakouts from consolidation and continuation patterns near support zones.
Trading Strategy
1. Entries:
• Consider long entries on pullbacks to support levels ($2,450, $2,425) with stops below $2,400.
• Breakout trades above $2,480 targeting $2,500.
2. Stops and Risk Management:
• Use trailing stops to lock in profits.
• Maintain a risk-reward ratio of at least 1:2.
3. Monitoring:
• Watch for trend reversals or significant breaks of support levels.
• Continuously monitor lower timeframes for precise entries and exits.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.