Trump Tax Hopes Hurting Gold
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Yesterday’s close: Gold settled yesterday’s session at 1290.
Fundamentals: The metal is back in the red this morning and seeing pressure on a stronger Dollar and rising yields after the Senate adopted a budget last night. This paves the way for President Trump’s tax plan and has marched equity markets higher; safe haven buyers coming into Thursday morning are paring back positions. However, Gold should not be forgotten just yet. If we look at the key drivers of the metal this week, the failure of the recovery to hold 1300 relied quite a bit on speculation that a more hawkish outsider will take the helm of the Federal Reserve. This is now not the case as current Fed Governor and Yellen ally, Jerome Powell is now the clear front runner. We have Existing Home Sales data at 9:00 am CT and Yellen speaks at 6:30 pm CT tonight. Cleveland Fed President Mester speaks later today at 1:00 pm CT.
Technicals: The bulls notched a solid session yesterday; rejecting support and achieving a close at 1290, above the 1289.4 level which we referenced would neutralize the tape from bearish. This led to a swing high of 1292.9 before the news broke out of the Senate. Not only did the news hamper the metal, but second resistance was rejected. Price action is floundering at the moment and retesting key support that is now at 1277.6-1281.3; a move below here could easily open the door to major four-star support below within the next 24 hours of trading. The bulls must be nimble until a move back above 1289.4.
Resistance – 1289.4**, 1293**, 1298.4-1302.7**, 1308.4-1312.6**, 1324.3**, 1341-1344.6***, 1362.4
Support – 1277.6-1281.3**, 1262.8-1269***, 1243.6**