Fundamental Analysis

• The Dollar Index fell, making gold relatively more attractive for purchase.
• The Federal Reserve is cautious about rate cuts, and Nvidia’s earnings were good, suggesting the AI boom continues.
• Comments from FOMC members later in the week are in focus as they search for the timing of rate cuts.

XAUUSD Technical Analysis

Analyzing the daily chart of gold, the descending trendline acts as resistance, and the Ichimoku cloud hovers above as an overhead resistance. The minutes from the Federal Reserve highlighted caution towards rate cuts, and the highly anticipated Nvidia earnings were very positive. Therefore, it is natural to expect a delay in the timing of rate cuts.

If the timing of rate cuts is pushed back, it could be a bearish factor for gold, but gold became relatively more attractive last week as the US Dollar Index fell. Whether there is a strong bullish factor for gold at present remains questionable.

As such, it might be expected that selling on rallies could be a likely strategy.

Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of gold, it had risen to around USD 2040 but has since pulled back. At the time of writing, it is trading around USD 2030, with the RSI gently declining.

Since the RSI has not dropped below 50, it cannot be judged as a downtrend, but considering the fundamentals alone, there seems to be a high possibility of a decline. At this point, as technical conditions are not fully met, it is advised to avoid easy entries.

For day trading, the strategy would be to aim for selling on rallies in the long term. The target is around USD 2020, with a trial sell near USD 2035. If recent highs of USD 2041 are exceeded, it would be necessary to reconsider the bearish perspective.

Support and Resistance Lines

Upcoming significant support and resistance lines:

USD 2045 – Major resistance line
USD 2005 – Major support line

Market Sentiment

XAUUSD Sell: 74% Buy: 26%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.