Technical Analysis for Gold – Price movement remains in a range

Basic overview

Gold prices remain range-bound due to a mix of factors. Real yields have risen recently, limiting the upside, but economic data showed no signs of inflationary pressures and interest rate expectations remained unchanged.

Since the Trump-Biden debate, there has been a compelling narrative that Trump has essentially already won the election and his policies will be inflationary, which would keep real yields high for longer or even cause them to rise significantly.

While there are some good arguments in this narrative, given the different context, it seems premature to price in such developments now. The market may have moved so much mainly because nothing else was happening.

However, we will have a lot of important economic data coming out in the next few weeks, including NFP and CPI, so it will be interesting to see how the market will react to these catalysts.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold continues to maintain a range-bound price action. From a risk management perspective, buyers have a better risk-reward ratio around the key 2277 support zone, where we can also find the 38.2% Fibonacci retracement level for confluence.

Sellers, on the other hand, want the price to fall below the support to change the bias and increase the bearish bets on the next support around the main trend line, where we can also find the 61.8% Fibonacci retracement level for confluence.

Gold Technical Analysis – 4-hour time frame

On the 4-hour chart, we can see that the price is now trading in a tight range between the 2320 level and the 2337 resistance. Buyers will want to see the price break higher to gain more conviction and position themselves for a next rally to the 2387 level. Sellers, on the other hand, will want to see the price break lower to continue targeting a decline to the 2277 support.

Gold Technical Analysis – 1-Hour Timeframe

On the 1-hour chart, we can see the tight range more clearly as we await the key catalysts in the next few days. If the price stays below the 2320 level, the short-term bias is more bearish, while above the 2337 level, the bias is more bullish. The red lines define the average daily range for today.

Upcoming catalysts

Today we have US job openings and Fed Chair Powell’s speech. Tomorrow we have US ADP, US jobless claims, US ISM services PMI and FOMC meeting minutes. Thursday is a US holiday, Independence Day. And finally we end the week on Friday with the US NFP report.

Watch the video below