Opinion with Peter Hug
Technical Levels Remain Trader's Focus Points
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(Kitco News) - Gold has been trading to pattern over the past few days, mirroring the moves in the $U.S. Friday’s push lower was the result of the Trump administration’s announcement of steel and aluminum tariffs, which sparked fears of a trade war and sent the dollar higher primarily in anticipation that tariffs would result in higher inflation ( a more aggressive Fed) and our trading partners, especially China, may back away from supporting our Treasury auctions, which again would require higher yields to encourage buyers into U.S. paper. The key to trading these markets has been technical levels. When gold bounced back over $1,307 on Friday, technical traders re-entered the long side after the euro re-established above the 1.22 euro/dollar pivot point. The acceleration of the dollar decline since Monday morning, with speculation that the tariffs may be watered down or exemptions granted to certain counties, has taken the edge off the recent concerns. But the final verdict remains in question, which will continue to create volatility. Would expect gold to have some resistance at the $1,337 level, but a break through here suggests a test of the $1,355 level. Watch the $1,327 level for initial support and then again at $1,322.