Technical Analysis

Gold price experienced the largest single-day decline in recent months last Friday, downed by $82. The price stayed within the range of 2320-2360(1) early last week until Wednesday after a disappointing ADP employment figure was released. It cleared the resistance(2) in the Asian session on Thursday. The breakout triggered a new round of buying, resulting in a weekly high of 2387(3) within 24 hours. However, the gold price started selling at the European session on Friday, again back into the previous sideways range(1). After the release of US employment data that evening, the price fell below 2320(5) and touched our target of 2300, closing at the weekly low near 2286.

As mentioned last week, the gold market is in a profit-taking cycle. The latest data from the COMEX gold futures shows that the open interest continues to decline, at 440,000 contracts now. This is about 90,000 contracts less than the peak when gold prices reached a historical high a few weeks back. This indicates that the long buying is still on the limited side, and there is still room for further decline. The key events this week are the US inflation data and the FOMC meeting on Wednesday. Take advantage of a range-bound market while investors are waiting for these economic figures at the beginning of the week. From the M-T perspective, gold prices are still in the phase of consolidation. It will be a good chance to short-sell the market if the high level of uncertainty this week leads to a jump in gold prices.

1-hr chart > The key support level is at the previous low of 2280-2285(6). Expect the price to be bounded within the range of 2280-2320(7), while the market is waiting for Wednesday’s news. A new round of selling will be triggered if the price breaks through the support zone(6).

Daily Chart > Gold cleared the ascending channel(9) last week. The closing near the weekly low on Friday indicates that the selling is still dominating the market, and the price might have another attempt to the low in the next 2 days. In S-T, support lies at the previous low of 2277 (10). If there is a successful breakthrough below 2277(10) later this week, the first target can be set at the 50% retracement level around 2216(11).

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Gold has started its rebound after a series of important U.S. economic data went worse than expected since the beginning of this month, and the US inflation data slowed further last week has accelerated the upward momentum. The price rose to a one-month high of 2422 on Friday, with the week ending near 2414. Note that the price of silver also broke through the 2020 high of US$30 on the same day, reflecting that the precious metals market is strengthening and the bullish trend should resume very soon.

1-hr chart – The upward trend accelerated last week from the support line (1) to (1.1). Gold cleared all the short-selling orders near the previous high of 2430 early in the Asian session on Monday reaching a new high of 2440. While the resistance of 2430(2) is cleared, a new round of buying should be triggered in the next 48 hours, and the target in the early part of this week can be set at 2450 or even higher. Notice, the key support is now at 2430. If the gold price returns below 2430, the current upward momentum will slow down, and the trend will reverse.

Daily Chart—Last Friday was the first time gold prices closed above 2400, showing that buying orders above 2400 are starting to dominate, the first signal for gold prices to break higher. Gold fluctuated by about US$150 during the consolidation period in the past month(3). The M-T target can be set near 2580(3), a 1:1: ratio. As long as the price stays above 2431 on the daily chart, the S-T target can be set at 2448.

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Gold tested the 2280 support 3x last week, with the lowest hitting a 4-week low of 2277. The gold price held on to the 2280 support following a relatively neutral Powell’s Fed announcement and weak US employment data. Since the price has bottomed out near the end of last week, expect the gold price to initiate a rebound in S-T.

1-Hr Chart – The gold price has rebounded quickly each time after it touched the 2280(4) support last week, showing strong buying near the 2280-5(4) level. The downward trend that originated on Apr 20 has ended after the price broke out from the downward resistance line(1) in the early Asian session back from the weekend. The S-T target can be set at 2328(2). There is no important economic data scheduled to be released this week, so once the gold price clears the resistance at 2328(2) later this week, the next target can be set at 2350(3).

Daily Chart – The gold price has not been able to stay below 2300(7) for more than one day, reflecting the strong buying support below 2300. We can operate the 10-day MA(5) and the 20-day MA(6), taking advantage of the 2280-2355(8) range in S-T. Based on the current market conditions, I believe the gold price needs more news stimulation for it to escape the 2280-2355(8) range.

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Gold fell to a 2-week low of 2391 at the beginning of last week, but buying has resumed after a weaker-than-expected US GDP Q1 data, leading the price to reach 2352 before the US session on Friday. There were no surprises in the release of the U.S. inflation figures on that day; therefore, the market was relatively quiet before the weekend. Two major U.S. economic news are expected this week: the Fed. meeting on May 1st and the U.S. employment figures on Friday. As geopolitical risks in the Middle East fade out, the U.S. interest rate trend will now become the focal point of gold traders. According to CME FedWatch, 99.5% of the chances that the Fed. will keep interest rates unchanged this week (Unchanged – 97% in June / Unchanged – 68% in July). Expect the market to stay in a tight range before the Fed. meeting. If the Fed. announcement leans toward a more hawkish tone, just like Powell’s speech 2 weeks back; some more selling momentum will add to the gold price.

1-Hr Chart—Gold prices broke out from the S-T uptrend channel(1.1) in the Asian session early Monday. As the price escape channel(1), the upward momentum is now slowing down. Take advantage of the 2318-55(2) range in S-T until the Fed. meeting. If gold prices fall below the 2318-28 support zone earlier than expected, the next support level will be at 2300, and the descending channel (3) will dominate the trend for the rest of the week.

Daily Chart – The price fell back below the 20-day MA(5) after the rejection of the 10-day MA(4) last Friday, and the short-selling pressure has been increasing since then. The Fed announcement should dominate the gold price trend in the coming weeks; be patient with the news and the breakout caused by it. Before the next major move, trade the 2290-2351(6) range. If gold prices fall further, the next target will be near 2260(7).

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The rapid retraction from the new high suggests the gold price has entered a short-term correction period.

Gold reached a new all-time high of 2431 last Friday after the US market opened, but the price quickly retreated. It lost key support of 2400 and 2380, falling back to the bottom support of Thursday near 2330, ending the weekly at 2343 with a slight increase of 13 dollars. The market had been anticipating retaliatory actions from Iran following the attack on the Iranian embassy in Syria, creating a relatively tense environment that led to the climb in gold prices in the past two weeks. There was noticeable profit-taking in the market, coincidentally 24 hours before Iran’s retaliation. After the long-awaited Iran’s retaliatory action, the risk sentiment decreased abruptly; although gold opened with a gap of around 10 dollars on Monday’s Asian session, the movement remained relatively calm. The S-T upward trend began to slow down after the rapid retracement on Friday. At this point, we can expect a range-bound consolidation to begin to form this week.

1-Hr Chart – The gold price has been steadily climbing along the upward trend channel(1) since it broke through the 2300 resistance at the night of the non-farm payroll at the beginning of the month. The price is still sitting within the upward channel(1). However, S-T resistance is expected around 2375-2380 after the market experienced significant volatility on Friday. For now, the trading range for this week can be set at around 2318-2380(2).

Daily Chart – After the reversal in gold price last Friday, there is a clear indication of a potential peak (3). As long as the closing price in the next two days remains below 2373 (4), a more noticeable correction is likely to occur. The initial target for this correction can be set around the 20-day moving average (5).

Monthly Chart – It is important to note that the gold price is approaching the upper boundaries of the long-term upward channels (6) and (7). For the upward trend to continue, the gold price must break through the resistance line at the top of the channels. Otherwise, a correction in the overall trend may be needed.

S-T ressitance 3

2380

S-T ressitance 2

2370-72

S-T ressitance 1

2365

Market price

2359

S-T support 1

2350-52

S-T support 2

2345

S-T support 3

2338-40

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Risk Disclosure: Gold Bullion/Silver (“Bullion”) trading carries a high degree of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. This article is for reference only and is not a solicitation or advice to trade any currencies and investment products . Before deciding to trade Bullion you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment or even more in extreme circumstances (such as Gapping underlying markets) and therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading Bullion, and seek advice from an independent financial advisor if you require. Client should not make investment decision solely based on the point of view and information on this article.  

Following the Fed meeting, gold reached a new all-time high of 2222 last week. However, it failed to stay above 2200 and retraced quickly below the previous high of 2195 within 24 hours. This Friday is a US holiday, but the inflation data(PCE price index) will still be released. Make sure you pay close attention to market volatility at the late Friday session and the early Monday Asian session, and exercise caution in managing risks.

1-hr chart – The price broke through the S-T resistance(1) last week and reached our target range of 2185-2190 (2). Although it subsequently reached a new high, the price is now falling back to 2147-90(3). The resistance zone of 2186-90(2) is still valid. Take advantage of the rebound driven by the newly formed upward channel(4) at the beginning of this week, and expect the price to be bound within 2147-90 (3) in S-T until another news breaks out.

Daily chart – After the quick pull-back after the Fed. Meeting last week, a reserval signal(5) has appeared. Unless the gold price can close above 2190 on the daily chart, an S-T consolidation period is likely to occur in the next two weeks. Again, 2147 is the key support level, once its clear the next support will be at the 20-day MA.

S-T ressitance 3

2190

S-T ressitance 2

2185

S-T ressitance 1

2180

Market price

2175

S-T support 1

2168

S-T support 2

2165

S-T support 3

2155

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Risk Disclosure: Gold Bullion/Silver (“Bullion”) trading carries a high degree of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. This article is for reference only and is not a solicitation or advice to trade any currencies and investment products . Before deciding to trade Bullion you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment or even more in extreme circumstances (such as Gapping underlying markets) and therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading Bullion, and seek advice from an independent financial advisor if you require. Client should not make investment decision solely based on the point of view and information on this article.  

After reaching a new high of 2195, the gold price stayed sideways between 2155-85(1) last week. This week’s only major event will be the Fed meeting. Following the slight rebound in US core CPI data last week, expect the post-Fed meeting announcement to lean towards a hawkish stance, which could have a bearish impact on the gold price.

1-hr Chart – The gold price is still bounded within the range of 2155-85 (3), and it is currently trading under the S-T resistance line (2) that has been in place for the past few trading days. If the critical support level of 2147-2150(1) is breached, the next downside target can be set around 2120(4).

Daily Chart – Structurally, there hasn’t been any significant change on the daily chart, with the upward channel(5) remaining valid. The gold price is still standing above the previous high of 2147(7). If the buying support from the previous high of 2147(7) is cleared, a major correction toward 2120 should occur and pay attention to the next support at the 20-day MA(6).

S-T ressitance 3

2168

S-T ressitance 2

2160

S-T ressitance 1

2155

Market price

2152

S-T support 1

2147-50

S-T support 2

2140

S-T support 3

2130

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Risk Disclosure: Gold Bullion/Silver (“Bullion”) trading carries a high degree of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. This article is for reference only and is not a solicitation or advice to trade any currencies and investment products . Before deciding to trade Bullion you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment or even more in extreme circumstances (such as Gapping underlying markets) and therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading Bullion, and seek advice from an independent financial advisor if you require. Client should not make investment decision solely based on the point of view and information on this article.  

The gold price was unstoppable last week. It broke clear the December high of 2088 and surpassed the historical high of 2147. On Friday, even with better-than-expected US non-farm payroll data, it continued to rise before the market closed, reaching a new all-time high of 2195. This week, the US will release core CPI and retail sales data on Tuesday and Thursday, if inflation slows down and the data disappoints, we can expect the gold price to continue its upward movement.

1-hr Chart – The gold price was rejected by 2190(1) again during the Asian session today. Since breaking through the resistance at 2147-2150 last week, an S-T upward channel(3) has formed in the past 48 hours. If the gold price breaks below the upward channel(3) after Tuesday’s data, the trading range can be set between 2155-85(2).

Daily Chart – After breaking through the December high of 2088 (4) last week, gold officially began its uptrend. The upside target 2190, estimated based on the previous consolidation range of 1:1 (4.1), has been reached. As the gold price is approaching the upper resistance of the M-T upward channel(5), the gold price has pullback(6) before the market closed on Friday. Keep an eye out; it would be the first signal of another surge if the gold price closes above 2178 on the daily chart in the next 2 days. Otherwise, a retreatment toward 2147-50 will begin.

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A series of US data was released last week. The durable goods orders and 4Q GDP announced early on Tue’s and Wed’s were both below market expectations. However, the price of gold remained in a narrow range. It wasn’t until Thur’s release of the core PCE price index that the gold price finally broke clear the resistance zone of 2035-40. On Fri, a new round of buying was triggered after a weaker-than-expected manufacturing PMI pushed the price to the recent high of 2088.

The latest CME FedWatch indicates that the probability of a rate cut in May is now around 27%, while the likelihood for June has risen to around 70%. The rate cut news/rumours will push the gold price higher, however, the 2088 resistance still needs to be clear. Once the price passes 2088, the 1st target can be set at around 2045. A strict stop-loss order should be in place if you choose to short-selling above 2080.

1-Hour Chart – Gold has triggered a round of buying after escaping the triangle pattern (1) last Thur. The upward momentum has accelerated on Fri’s US session, passing the early Feb high of 2065(2) and reaching the Dec high of 2088(3). The buying momentum failed to carry on at the early Asian session back from the weekend. A high-volume market condition is needed for gold to clear the 2088 resistance, pay attention to Tue’s non-manufacturing PMI, Wed.’s Powell speech. Consider the trading range of 2065-88(4) for now.

Daily Chart – Gold escapes downward channel (4) last week, and the M-T trend shifted from a downtrend to a sideways consolidation, where the range has expanded from 1985-2065(5) to 1985-2088(5.1). The price needs to break above 2088 in terms of structure to initiate a new round of buying orders.

S-T ressitance 3

2100

S-T ressitance 2

2095

S-T ressitance 1

2085-88

Market price

2080

S-T support 1

2070

S-T support 2

2065

S-T support 3

2018-20

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Risk Disclosure: Gold Bullion/Silver (“Bullion”) trading carries a high degree of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. This article is for reference only and is not a solicitation or advice to trade any currencies and investment products . Before deciding to trade Bullion you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment or even more in extreme circumstances (such as Gapping underlying markets) and therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading Bullion, and seek advice from an independent financial advisor if you require. Client should not make investment decision solely based on the point of view and information on this article.  

The expectation of the Fed’s interest rate cuts continues to support the fundamentals of the gold price. However, since the market kept delaying the rate cuts schedule without significant economic news, gold was traded sideways above 2020 last week. More news is expected this week, with the US announcing durable goods orders, 4Q GDP, PCE inflation, and manufacturing PMI. Regardless of whether the data is better or worse than expectations, the daily price fluctuations of gold should be widened toward around the $20 range. Considering the current market sentiment, unless these data significantly exceed expectations, it will not be easy for gold to break free from the current sideway sentiment. Therefore, we can continue to take advantage of the 2015-2040 range this week.

1hr chart – Last week, the daily price fluctuations of gold expanded from a narrow range at the beginning of the week to a broader USD 25 range (1) near the week’s end. The market dynamics should be similar to last Fri. on data release days this week. The resistance zone around 2035-2040 is still valid, and the day trading strategy should continue to be based on the range of 2015-40.

Daily Chart – After the rejection of 2041 on Friday, the rebounding cycle from the bottom of the downward channel(3) is getting close to an end. Short-selling near 2040 in the next 1-2 days will be ideal if the gold price is to touch 2040 again. Once the price falls below the 20-day ma(4) near the end of this week, the adjustment target can be set at 2010 or even lower for next week.

S-T ressitance 3

2045

S-T ressitance 2

2040

S-T ressitance 1

2035

Market price

2031

S-T support 1

2030

S-T support 2

2025

S-T support 3

2018-20

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Risk Disclosure: Gold Bullion/Silver (“Bullion”) trading carries a high degree of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. This article is for reference only and is not a solicitation or advice to trade any currencies and investment products . Before deciding to trade Bullion you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment or even more in extreme circumstances (such as Gapping underlying markets) and therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading Bullion, and seek advice from an independent financial advisor if you require. Client should not make investment decision solely based on the point of view and information on this article.