Gold Support By Immense Dollar Weakness
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Last week’s close: Settled at 1334.9
Fundamentals: Supporting Gold has been a complete breakdown in the Dollar. Please read our Tradable Events this Week: SPECIAL REPORT, to get details on why we are seeing immense Dollar weakness. Price action in the metal extended to a high of 1345 during holiday trading hours, the highest since topping out in September last year. After selling off hard to start the week, the Dollar has gained some footing on comments from the ECB that they do not intend to change their pledge of bond-buying at their meeting next week. In their Monetary Policy Minutes released last Thursday, the discussion eluded to this being done soon and many, including us, have speculated next week. This short-term shift does not change the long-term fundamentals we have discussed for the currencies or Gold. Today we have NY Empire State Manufacturing at 7:30 am CT and tomorrow we look to Industrial Production and Fed Presidents Evans and Kaplan.
Technicals: We have had our next resistance to the upside in Gold at 1335.8. Last week we called for this level to be achieved before Friday, the high was 1340. Price action is hugging this level after pulling back about $10 from new swing highs. The long term technicals are extremely bullish, however, in the near term the RSI has been above 70 for almost all of 2018 and the Commitment of Traders as of the week ending January 9th show the largest speculative net-long position since the bath at the end of November. It would be prudent to lock in some gains. First key support comes in at 1327.3-1330.5 and price action will remain extremely constructive as long as this level holds.
Resistance – 1335.8**, 1358-1365***
Support – 1327.3-1330.5**, 1321.6**, 1307.1-1308.9**, 1302-1303.4***