Basic overview
Gold fell to a new two-month low this week, as the lack of tangible progress on the US-Iranian side and hawkish risks from the Federal Reserve continue to weigh on the precious metal.
Despite expectations of an imminent agreement and the reopening of the Strait of Hormuz, we have not yet received anything official. There was a lot of noise. Moreover, in the past few days, the United States and Iran have exchanged limited military strikes, but the American side continues to say that the ceasefire still exists.
On the Fed side, more and more policymakers are now pushing to abandon the accommodative bias, so we can expect that to happen at the FOMC meeting in June. Furthermore, if nothing changes on the US-Iranian side before then, we could get a hawkish surprise as inflation continues to rise and US data remains resilient.
In the short term, a solution and reopening of the Strait are likely to support gold due to lower oil prices and increased bets on interest rate cuts. But if the Strait remains closed for longer and oil prices remain high, the risk that the Fed will have to raise interest rates anyway will increase.
Technical analysis of gold – daily time frame
Gold – daily
On the daily chart, we can see that gold fell to a new two-month low this week and is approaching a major uptrend line. If the price gets there, we can expect buyers to step in with specific risks below the trend line in order to prepare for a rally to the major downtrend line. On the other hand, sellers will look for a breakout to increase bearish bets to the 3,885 level next.
Technical analysis of gold – 4-hour time frame
Gold – 4 hours
On the 4-hour chart, we can see that the price has almost reached the key level of 4,350. We can expect buyers to step in there with specific risks below the level to put them in a position to pull back to the downtrend line. On the other hand, sellers will look for a breakout to increase bearish bets in the major uptrend line.
Technical analysis of gold – 1 hour time frame
Gold – 1 hour
On the 1 hour chart, we have another simple bearish trend line outlining the bearish momentum on this time frame. Sellers will likely continue to rely on the trend line with specific risks above it to continue pushing towards new lows, while buyers will look for a breakout above the trend line to extend the pullback to the next trend line. Red lines define Average daily range For today.
Upcoming stimuli
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