Gold thrives as stagflationary risks continue to increase

Fundamental Overview

Gold has been on a steady uptrend lately as traders have been finding shelter in the precious metal amid stagflationary risks. In fact, we are seeing inflation expectations rising while growth forecasts get revised lower.

Last Friday, we got some more bad news as the final University of Michigan survey showed consumer sentiment slumping even more than preliminary report and long-term inflation expectations got revised higher.

The spike overnight came after the WSJ report saying that Trump is weighing broader and higher tariffs with hikes potentially going up to 20%.

In the bigger picture, as long as the Fed doesn’t change its reaction function and doesn’t consider rate hikes, the trend should remain to the upside as real yields will continue to fall amid the stagflationary pricing.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold rallied into yet another all-time high as traders continue to flock into the precious metal. From a risk management perspective, the buyers will have a better risk to reward setup around the major trendline to position for further upside. The sellers, on the other hand, will want to see the price breaking below the trendline to start targeting a deeper correction into the 2832 level.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a minor upward trendline defining the bullish momentum. If we were to get a pullback into the trendline, we can expect the buyers to lean on it with a defined risk below it to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the next major trendline.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have yet another minor upward trendline. As the fundamentals continue to favour the upside, the buyers will look for every dip-buying opportunity to position for further upside. Right now, the price is struggling to extend into new highs as we reached the upper bound of the average daily range for today.

If we get a pullback into the trendline, we can expect the buyers to step in to position for new highs, while the sellers will look for a break lower to extend the pullback into the next trendline.

Upcoming Catalysts

Tomorrow we get the US Job Openings and the US ISM Manufacturing PMI. On Wednesday, we have the US ADP and the unveiling of the US reciprocal tariffs plan. On Thursday, we get the US ISM Services PMI and the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report and Fed Chair Powell speech