Gold Feels The Pain From A Strong USD
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Featuring views and opinions written by market professionals, not staff journalists.
Yesterday’s close: Settled at 1333, up 9.0
Fundamentals: The Dollar Index is at the highest level since January 12th and Gold is feeling the pain. The metal is trading $10 from its session high last night and has proved yesterday’s equity market provoked traction was nothing more than a dead cat bounce. Does this deter our long-term expectations for Gold? Not one bit. The metal remains extremely constructive on the year and going back much further. Right now, traders do want to be cautious until there is more near-term certainty, but opportunities could quickly present themselves with the ECB tomorrow morning, and a string of key U.S data reads Thursday and Friday. Today is expiration for both May Gold and Silver options, and the long call holders are certainly feeling the pain; the passing of this event could bring some relief.
Technicals: Yesterday’s settlement above 1331.9 should have brought better footing but Gold has now traded to a new swing low. This is the second test into key support at 1322.4-1325.4 and this support level is getting stretched. Tremendous support sites below here at 1311.3-1316.6 and this keeps the immediacy of the longer-term uptrend intact.
Resistance: 1331.9**, 1337.1-1337.6**, 1345.7-1348.8**, 1356.7-1358.4**, 1367.8-1370***
Support: 1322.4-1325.4**, 1311.3-1316.6***