Gold has been stuck in a consolidation zone recently as the market awaits the release of the US Consumer Price Index scheduled for today. In the big picture, gold should remain supported as we head into an interest rate cutting cycle. Furthermore, even if CPI data comes out strong, the numbers should start looking much better in the second quarter as high readings from the first quarter of 2023 will be excluded from the calculation. The difficult part is mixing the short-term trend with the long-term trend, and for this we can get some help from technical analysis.
Technical analysis of gold – daily time frame
Daily gold
On the daily chart, we can see that gold has recently been consolidating around a major support area around the 2020 level where we can also find a confluence with the trend line and the 61.8% Fibonacci retracement level. This is where buyers with specific risks accumulate below the trend line to put them in a position to rally to a new all-time high. On the other hand, sellers will want to see the price break down to invalidate the bullish setup and put in a bearish position to the 1970 level.
Technical analysis of gold – time frame 4 hours
Gold 4 hours
On the 4-hour chart, we can see that we have a downtrend line that defines the current downtrend in the short term. Sellers will likely rely on a trend line with specific risks above it to take a position for a breakout below the major uptrend line. On the other hand, buyers will want to see the price rise higher to invalidate the bearish setup and increase bullish bets to an all-time high.
Technical analysis of gold – 1 hour time frame
Gold 1 hour
On the 1-hour chart, we can closely see the recent price action with gold trading between 2020 support and 2040 resistance. There is not much you can do here other than wait for key levels and setups to succeed. Pay attention to the data today as we are likely to see big moves next.
Upcoming events
Today we will get the latest US CPI report and US unemployment claims numbers. Strong data is likely to weigh on gold, while weak numbers should give it a boost.
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