TSX slips after index extends retreat from all-time high
On analysis of the movements of the gold futures in 1 hour chart since Tuesday, I find that despite testing a record high at $3794.82/oz in Asian trade on Tuesday, currently trading in a narrow range and constantly facing stiff resistance at $3790, could slide instantly within next few hours as recent comments from Federal Reserve officials sparked some caution over future interest rate cuts.
I anticipate that gold futures are on edge ahead of a string of key US economic signals this week, most notably an address by Fed Chair Jerome Powell later on Tuesday. Purchasing managers index data for August is also due today, while a key inflation indicator is on tap later in the week.
On the other hand, several Fed officials struck a cautious stance on expectations of additional interest rate cuts by the central bank on Monday, with Atlanta Fed President Raphael Bostic stating in an interview that he did not favor a rate cut in October due to concerns over sticky inflation.
Technically, if the gold futures find a sustainable move below the immediate support at the 20 DMA at $3777 could push the futures to test the next support at the 50 DMA at $3740 in today’s session and if the gold futures sustain below this significant support at 50 DMA for an hour or two, next targets could be the 100 DMA at $3717 and 200 DMA at $3706 within next few hours.
Inversely, any sustainable move above the immediate resistance at $3794.82 will provide a good opportunity for the big bears to load fresh shorts above $3821 with a stop loss at $3844 for a target at $3688 for this week.
Disclaimer: Readers are requested to take any position in gold at their own risk, as this analysis is based only on observations.