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Gold Will Be Vulnerable To Selling Waves

Commentaries & Views

Yesterday’s close: Settled at 1318.6

Fundamentals: Yesterday was not the combination that Gold bulls want to see; a stronger Dollar and higher rates because of more hawkish monetary policy. As we have discussed, higher yields because of ramped up fiscal policy that induces inflation is bullish Gold. Though a more hawkish monetary policy serves as a near-term headwind, we believe Gold will remain constructive as it digests these possibilities. Lost in translation yesterday was a very poor read on Durable Goods and this will weigh on first quarter GDP. Fed Chair Powell surprised markets with a strong tone that was more hawkish and assertive than anticipated but not overall surprising. He resumes his congressional testimony tomorrow.

Technicals: Yesterday, we discussed how Gold failed to get out above first key resistance and a move below first key support will send prices lower and open the door for a longer consolidation phase. This is where we find things now. We remain very upbeat on the long-term prospects for Gold. In the near term, we want to see support at 1319-1322.1 continue to hold on a closing basis. Though the market is vulnerable to waves of selling down to our rare major four-star support at 1302.2-1309, this should present a buying opportunity.

Bias: Bullish/Neutral

Resistance: 1328-1331.7**, 1343.2-1344.9**, 1350.2-1351.3**, 1367.8-1370***

Support: 1319-1322.1**, 1302.3-1309****, 1293.2***

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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