Gold is consolidating as the market awaits the next key catalyst to trigger a breakout. What’s next?
Fundamental Overview
As the market finished to reprice the interest rates expectations for the Fed and got back in line with the central bank’s baseline scenario of two rate cuts in 2025, the pressure on gold waned and the precious metal started to climb up again.
Last Friday, Trump’s threat of imposing a 50% tariff on EU on June 1st because of slow progress on trade negotiations boosted gold, but as things improved and the tariffs got delayed to the original deadline in July, gold erased all the gains.
In the bigger picture, gold remains in an uptrend as real yields will likely continue to fall amid Fed easing. But in the short-term the repricing in rate cuts expectations could weigh on gold, so watch out for the economic data and Fed comments.
For now, we are stuck in a big consolidation as the market awaits the next key catalyst to trigger a breakout and a more sustained trend.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold rejected the downward trendline that’s been defining the correction. That’s where the sellers stepped in with a defined risk above the trendline to position for a drop back into the major upward trendline. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into a new all-time high.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had a minor upward trendline defining the bullish momentum on this timeframe. The price broke below the trendline today and the sellers started to pile in for a bigger pullback into the 3278 level. That’s where we can expect the buyers to step in with a defined risk below the level to target a break above the major downward trendline.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the sellers remain in control for now and from a risk management perspective, the buyers will have a better risk to reward setup around the 3278 level. The red lines define the average daily range for today.
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