Fundamental Overview
The Federal Reserve recently initiated an easing cycle with a 50 basis point cut, a move that was largely anticipated by the market. This decision was seen as an “insurance” cut, with indications from the dot plot suggesting the possibility of two more 25 bps cuts by the end of the year, contrary to market expectations for 2025. Following the announcement, gold initially weakened but later surged as inflation expectations outpaced nominal yields, leading to a decline in real yields. Market sentiment continues to reflect a 41% probability of a 50 bps cut at the next meeting and a total easing of 73 bps by year-end. Investors are advised to monitor US economic data in the coming weeks, as strong data may prompt a market correction, while weak releases could provide support.
Gold Technical Analysis – Daily Timeframe
Gold Daily
Analyzing the daily chart, it is evident that gold reached a new all-time high post the Fed’s decision. A trendline delineates the current bullish momentum, suggesting that buyers may utilize any pullback to establish new highs and sellers might look for a breakdown towards the 2482 level.
Gold Technical Analysis – 4 hour Timeframe
Gold 4 hour
Examining the 4-hour chart, the price surpassed the previous all-time high, which now acts as a support level after breaking through resistance. If a pullback occurs, buyers are likely to find support at the 2600 level, maintaining an uptrend. Conversely, sellers may seek a breakdown to capitalize on a potential drop towards the trendline.
Gold Technical Analysis – 1 hour Timeframe
Gold 1 hour
Upon reviewing the 1-hour chart, a minor trendline indicates bullish momentum. Buyers are expected to rely on this trendline for potential new highs, while sellers may target a drop towards the 2540 level by breaking below the support line. The red lines represent the average daily range for the day.
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Insight: Investors should also consider geopolitical tensions and the impact of geopolitical events on gold prices, as the precious metal is often viewed as a safe-haven asset in times of uncertainty. Additionally, monitoring the US dollar’s performance and any significant shifts in global economic policies can provide valuable insights into the future direction of gold prices.
