Did Gold Move Too Far Too Fast Friday
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold failed to maintain price action above major four star resistance on Friday; briefly trading to a high of 1270.5 after the missile attacks on Syria Thursday night and following that with a 1273.3 print after Nonfarm Payroll was released. Though payroll data fell well short of expectations at 98k, it was comments from NY Fed President Bill Dudley that put pressure on the metal. Not too long ago, he spoke on a “little pause” between the start of the Fed shrinking its $4.5 trillion bond portfolio and continuing to hike rates. At that time, a “little pause” was taken slightly dovish, however, on Friday his emphasis on “little” helped reinvigorate a hawkish tone. This failure was not all Dudley though, strong technicals were at work and it is not uncommon one bit to see an event like the missile attack move a market too fast in a short period of time, attracting all the buyers at the top end of a range creating a capitulation of sorts; as we always say, if everyone who wants to buy has already bought, who is left to buy. The Dollar is higher this morning and seeing further support from St. Louis Fed President James Bullard’s comments last night that the Fed could end its bond reinvestment program this year. We see strong resistance in the Dollar at these current levels and just above. First minor support for Gold comes in with a near term trend line at 1249 while strong support comes in at 1241.50-1244.50. Janet Yellen is set to speak at the University of Michigan at 3:10 CT. Fed Labor Market Indicators are due at 9:00 am. Though this is a shortened week due to Good Friday, Retail Sales is still due to be released then.
Resistance – 1257.3**, 1268.1-1269.1****, 1273.3**, 1280.8**, 1300**
Support – 1249**, 1241.5-1244.5**, 1235.6-1237.5**, 1222-1226.7***