Gold Prices Pressured By Rising US Dollar
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Last week’s close: Settled at 1356.2
Fundamentals: The Dollar is up more than 0.5% to start the week and this has put direct pressure on Gold. First, Gold lost significant ground in the latter half of Friday’s session and finished the electronic close $6 off its settlement. Very strong reads on U.S housing and Michigan Consumer data got the ball rolling on Friday. However, as we discussed on Friday’s Morning Express, a major driver in Dollar weakness and Gold strength has been the Yen. We noted explicitly that the Yen hit our rare major four-star resistance overnight into Friday and weakness here will correlate into Gold. There is no domestic data to start the week, but we look to FOMC Minutes tomorrow to be a driving force for the metal.
Technicals: Price action ran head on into major three-star resistance on Friday. We noted that we began Neutralizing our Bullish Bias on Friday morning. A move below first key support has put further selling pressure on Gold as long liquidate. This is healthy consolidation after a strong run last week. Still, we must see support at 1336.7 hold and ideally a close back above 1343.2 for the bulls to maintain an immediate-term upper hand. Traders must also watch the Dollar Index this week bouncing from a double bottom low. We discussed positioning in the longer-term in Silver on Sunday’s Tradable Events this Week.
Resistance: 1351.3**, 1367.8-1370***, 1377.8**, 1392.6***, 1432.9**
Support: 1336.7**, 1330.2-1330.4**, 1319-1322.1**, 1302.3-1309****