Equities Keeping Lid To Constructive Gold Market
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Last week’s close: Settled at 1287.3
Note: Traders want to begin using February Gold by tomorrow.
Fundamentals: Gold has continued to capitalize off a weaker Dollar, however, the gains have been subdued. The Dollar has lost 2.5% since its peak earlier this month and is now at the lowest level since September 26th. Gold on the other hand is about 1% lower from September 26th but ultimately range bound between 1270 and 1300. Prospects of stronger global growth, daily all-time highs in equity markets and a more hawkish ECB has worked to keep rallies in check. What it comes down to is the need for a catalyst. Do not get us wrong, Gold has traded in a very constructive manner, and we remain bullish. This will be a very interesting week with New Homes Sales due today at 9:00 am CT. However, tomorrow is jammed packed with speak from President Trump and next Fed Chair Powell as well as data that includes Consumer Confidence.
Technicals: Price action turned north this morning after holding first support and has now edged out first resistance at 1293.7. Strong three-star resistance comes in at 1298.4-1300 and this will be the key level that the metal must close out above in order to squeeze shorts and attract fresh buying. The chart remains extremely constructive and we have strong expectations for Gold in the first quarter, please contact us to see how we are positioning with options.
Resistance – 1293.7**, 1298.4-1300***, 1308.4-1312.6**
Support –1285.1-1286.2**, 1272.4***, 1267-1268**, 1262.8-1263.8**,1243.6*