Gold has fallen below a major upward trendline, reflecting increased bearish momentum amid a selloff in the US stock market. The decline in gold prices is compounded by weaker economic data and rising inflation expectations.
The next Non-Farm Payroll (NFP) and Consumer Price Index (CPI) reports will be important for market movement, with strong inflation data expected to impact gold negatively. Currently, the price is pulling back from all-time highs, and buyers may find better risk-reward potential around the 2790 level, while sellers target a break below this level towards 2600.
Technical analysis on the 4-hour chart indicates a downward trendline that characterises the ongoing bearish sentiment. Sellers are likely to push down towards the 2790 level if the price experiences a pullback, while buyers need to see a break above the trendline to regain bullish momentum.
On the 1-hour chart, a minor downward trendline suggests continued bearish pressure. Sellers may utilise this trendline to drive prices lower, while buyers aim for a breakthrough to the next trendline. Today, the week concludes with the release of US Personal Consumption Expenditures (PCE) data.
Gold’s movement remains in focus as price action struggles to find support amid a broader market selloff. The dip below a key trendline, which had previously offered strong support, signals that sellers remain in control. With economic data continuing to point towards higher inflation expectations, pressure on gold has yet to subside. Traders are watching whether the upcoming NFP and CPI reports reinforce this sentiment or provide some relief.
Jerome’s role in the Federal Reserve’s decision-making is once again under scrutiny. Inflation remains above target, and the Fed’s stance on rate policy will depend heavily on whether incoming data supports further tightening or allows for a shift in tone. Market participants should be prepared for volatility as any indication of persistent inflation could weigh further on gold. Inflation data exceeding forecasts has historically led to a strengthening dollar, which typically puts downward pressure on commodities.
The technical outlook aligns with this broader theme of uncertainty. On the 4-hour chart, a declining trendline remains intact, reflecting a pattern of lower highs. If gold attempts an upward move, it would need to break above this resistance to suggest a shift in momentum. Otherwise, sellers remain motivated to drive prices down towards the key 2790 level, which has acted as a pivotal point. A clean break below this could expose 2600 as the next target.
Shorter timeframes paint a similar picture. On the 1-hour chart, a minor trendline reinforces the current downward structure. This level is frequently tested, and traders can expect sellers to defend it aggressively. A failure to break through keeps pressure towards the recent lows, while any sustained move above this trendline would signal early signs of strength.
Today’s release of US PCE data adds another layer of complexity. Market reaction will hinge on whether inflationary pressures remain strong or show signs of easing. If the data comes in hotter than expected, gold may struggle to find buyers at current levels. Conversely, weaker inflation figures could provide a short-term reprieve, especially if market sentiment shifts in anticipation of a more cautious approach from policymakers.
Looking ahead, attention remains firmly on upcoming economic reports. The reaction to NFP and CPI will determine whether the current downtrend accelerates or stabilises. Volatility is expected as traders position for potential shifts in price direction.
