Gold rebounds strongly as hope for the end of the war returns. What’s next?
FUNDAMENTAL OVERVIEW
Gold rallied strongly yesterday following several positive developments on the US-Iran front. In fact, the bullish momentum got triggered by Trump pausing Project Freedom so that the US could work to finalise a deal with Iran. The pause was of course interpreted as another step towards a deal.
Later in the European session, we got an Axios report saying that US and Iran were getting close to a one-page memo to end the war and that US officials were expecting Iran's response to several key points in the next 48 hours. Tonight, we got reports that Iran was expected to deliver a response via Pakistani mediators today.
In the short-term, a resolution and the reopening of the Strait will likely support gold on falling oil prices and increased rate cut bets as inflation worries would ease.
After that though, the focus will quickly turn back to the Fed and the economic data. With the end of the war, the increase in economic activity could keep inflation higher for longer and eventually even require rate hikes to bring it sustainably back to the 2% target that the Fed has been missing since 2021. And that will set the stage for the next big crash.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that gold recovered all the losses since last week on the latest US-Iran developments. The price is still trading right in the middle of the two key trendlines, so there’s not much we can glean from this timeframe. We need to zoom in to see some more details.
GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the price broke above the strong resistance zone around the 4,650 and extended the gains as more buyers piled in on the breakout. The natural target is the April high around the 4,891 level. The sellers will need the price to fall back below the 4,650 level to regain control and position for a drop into the 4,350 level next.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see the minor consolidation after the breakout formed an upward triangle with the price currently breaking out. The buyers will likely increase the bullish bets here into the 4,891 level next, while the sellers will be better off waiting for the price breaking below the minor upward trendline to extend the pullback into the 4,650 support. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the latest US Jobless Claims figures and an Iran’s response to US’s war-ending proposal is expected to come via Pakistani mediators. Tomorrow, we conclude the week with the US NFP report and University of Michigan Consumer Sentiment survey.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
FX初心者には必須 無料のうちにGET！
