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Gold Technical Analysis

Written on 30th April, 2019

On the higher timeframe gold is stuck between a rock and a hard place in the futures markets (rolling front-month futures contract). It’s clear we have some key data releases coming up and this could be the defining moment for price and trend. If the result is favorable this recent move back to $1280/oz will look like a retracement but if the Fed continues to slow down and stocks become favorable the next support target could be $1244/oz. Looking at the technicals now price is struggling at the price in which most contracts where traded on COMEX. This is represented by the composite market profile on the left-hand side of the chart (bell curve). The price action (candles) look like they are rejecting the lows which are interesting as we have had a period of USD strength. The RSI has turned back positive and holds above the 50 levels. There is a large wedged triangle formation on the chart and the top could act as resistance. All in all its a pretty sideways pattern and as I mentioned this week FOMC and NFP reports are key.

The daily chart below presents us with a clear bull flag pattern and a breakout to the upside could indicate bullish momentum. The $1271/oz level held very well and now price sits at the same value area as the weekly chart looking for acceptance. The last few days price action has been choppy as the risk environment remains weak following the Chinese PMI data, this should have been positive for gold but with key risk events looming investors stood on the sidelines. The pattern on the RSI is also forming and keep a lookout for a break.