As talked about because the begin of the week right here, gold continues to maintain in a extra consolidative temper within the massive image. And that continues to be the case previously few days as effectively. The truth is, value is close to unchanged to once I wrote up the linked put up on Monday so go determine. Market gamers are specializing in Jackson Gap this week however should still be left wanting until Fed chair Powell affords some decisive feedback in a while, although unlikely.
For gold, that fairly presumably means having to attend on extra catalysts to influence broader market and greenback sentiment earlier than with the ability to react. For the reason that finish of Could, value motion has been consolidating at the same time as the basics proceed to remain comparatively supportive. I highlighted these elements within the linked put up above.
The present predicament for gold is that no matter what these elements could argue, the technical aspect of issues is pointing to a stall within the upside momentum. And in reality, we’re nudging in the direction of a key check on the charts with gold patrons already having to place up a protection because the finish of July.
Gold (XAU/USD) each day chart
Because the upside momentum stalls and we transfer in the direction of extra sideways value motion, it’s testing the resolve of patrons with the 100-day transferring common (crimson line) being known as into query. That degree is seen at round $3,315 at present.
Once more, as one other reminder we’ve not seen gold firmly dip beneath the important thing degree since October 2023. And that has largely reaffirmed the bullish momentum within the treasured metallic since final yr.
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 additional 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 Could lows round $3,120-54 can be a key line within the sand on any main retracement earlier than speaking concerning the 200-day transferring common (blue line).”
So, therein lies the danger for gold costs no matter how Jackson Gap may pan out. This can be one thing to contemplate particularly if markets should wait two extra weeks earlier than feeding off the subsequent US jobs information to handle the outlook heading into September.