4 min read Gold recovered close to 1% on Friday as the dollar softened following an unexpected fall in July retail sales and a weaker consumer sentiment reading, with September rate hike odds now priced at roughly a third after sitting above even money a week earlier. Minutes from the Fed’s July meeting are due on Wednesday, and the deadlock over reopening the Strait of Hormuz remains the two-sided risk in the background.
The 1-hour chart
Gold on the 1-hour chart, with the range lows, range equilibrium and range highs marked alongside the local Fibonacci reload zone.
Picking up from our previous coverage of gold, price is now working inside what looks like a developing range on the 1-hour chart. The range lows sit at around 4,310, the range equilibrium at around 4,380 and the range highs at around 4,440, and we’re currently trading just above that equilibrium area.
If we add a Fibonacci from the low to the high of the most recent lower timeframe move, the long reload zone comes in right in the range equilibrium area, marked with the green circle. Two separate references are pointing at the same band of price, which is what makes it the level worth watching today.
If gold comes down here and forms a bottom formation within that local reload zone, we could potentially see a move to the upside. A failure to hold the level opens the other outcome, a move down towards the range low area at 4,310.
The 15-minute chart
The 15-minute chart shows a compressed range with its low at 4,387 and its high at 4,411.
Zooming in, price action has been very compressed between two boundaries, with the range low at around 4,387 and the range highs at around 4,411.
A break below that range low, which is confluent with the 0.618 retracement, could be a signal that price is going lower. If instead we dip into the local long reload zone and then reclaim 4,387, that would be a decent sign of strength.
The reload zone itself sits between 4,380 and 4,385. A failure to hold it could potentially see that move down towards the 1-hour range lows.
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