Markets Analysis

Fundamental Analysis

• Gold continues to hit record highs daily, reaching a peak of 2379 USD at one point
• The U.S. PPI has risen for the first time in 11 months, though it fell short of market expectations
• USD/JPY is trading in the 153 range, with momentum for rise weakening

XAUUSD technical analysis

Gold’s ascent seems unstoppable. The U.S. CPI exceeded market forecasts, pushing back speculations of a rate cut. Normally, a retreat in rate cut expectations would put selling pressure on gold. However, it has hardly declined and continues to update its record high daily due to dip-buying.

Currently, it is forming a band walk between +1σ and +2σ lines of the Bollinger Bands, aiming for a target price of 2395 USD. The weekly RSI has exceeded 70, indicating overheating. Although the market is at risk of a sharp decline, selling could be dangerous. It might be wise to adopt a dip-buying approach for short-term trading.

Day trading strategy (1 hour)

Analysis of the 1-hour gold chart shows that after dropping from 2365 USD to 2319 USD, dip-buying has resumed, once again updating the record high. Currently, the momentum of rise has weakened slightly, but a strong upward trend continues.

I would consider entering a buy at around 2365 USD if the RSI rebounds at 50. The day trading strategy favors dip-buying. Entry at 2365 USD, take profit at 2393 USD, and stop at 2357 USD.

The strong rise is attributed to deteriorating conditions in the Middle East among other geopolitical risks. Gold is resurging as a safe-haven asset.

Support/Resistance lines

Moving forward, the following support and resistance lines should be considered:

2395 USD corresponds to 100% on Fibonacci.

Market Sentiment

XAUUSD Sell: 78% Buy: 22%

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.