As talked about for the reason that begin of the week here, gold continues to maintain in a extra consolidative temper within the large image. And that continues to be the case up to now few days as nicely. In truth, worth is close to unchanged to after I wrote up the linked publish on Monday so go determine. Market gamers are specializing in Jackson Gap this week however should still be left wanting except Fed chair Powell gives some decisive feedback afterward, although unlikely.
For gold, that fairly probably means having to attend on extra catalysts to influence broader market and greenback sentiment earlier than with the ability to react. Because the finish of Might, worth motion has been consolidating at the same time as the basics proceed to remain comparatively supportive. I highlighted these components within the linked publish above.
The present predicament for gold is that no matter what these components might argue, the technical facet of issues is pointing to a stall within the upside momentum. And actually, we’re nudging in direction of a key check on the charts with gold patrons already having to place up a protection for the reason that finish of July.
Gold (XAU/USD) every day chart
Because the upside momentum stalls and we transfer in direction of extra sideways worth motion, it’s testing the resolve of patrons with the 100-day shifting common (pink line) being known as into query. That degree is seen at round $3,315 presently.
Once more, as one other reminder we’ve not seen gold firmly dip under the important thing degree since October 2023. And that has largely reaffirmed the bullish momentum within the valuable steel since final 12 months.
As such, a technical break of the important thing degree might set off stops particularly whether it is accompanied by a break of the consolidation vary above amid an extra lack of shopping for urge for food. As talked about earlier this week:
“If there’s a key break there, it might set off technical stops on the best way down and result in a fast and sharp pullback in costs. The Might lows round $3,120-54 shall be a key line within the sand on any main retracement earlier than speaking in regards to the 200-day shifting common (blue line).”
So, therein lies the chance for gold costs no matter how Jackson Gap may pan out. This shall be one thing to think about particularly if markets should wait two extra weeks earlier than feeding off the subsequent US jobs knowledge to handle the outlook heading into September.
