Make Kitco Your Homepage

Gold Bears Are In The Driver's Seat Now

Commentaries & Views

Session close: Lost more than $10 and closed at 1286.2

Fundamentals: Gold failed a day sooner than we thought it potentially could. Yesterday, we discussed that the bulls were likely to cling to it near the 1294.5-1296.4 heading into today’s key read on PCE Price Index, the Fed’s favorite inflation yard stick. Expectations come in at 1.4%, far from their 2% target but this is still a critical number and can ultimately dictate much of the verbiage we get at the December meeting. The Dollar continues to gain ground after a revision higher on Q3 GDP yesterday and another strong read for housing with Pending Home Sales coming in better than expected. The data has been good this week, but tax-reform has also done a lot of the heavy lifting and a final vote in the Senate is expected before the end of the week. Let’s not forget that the S&P continues to make fresh all-time highs, reaching our upside call of 2633.50, which has also put pressure on the safe-haven play.

Technicals: Let’s not beat around the bush, the bears are now in the driver’s seat after the fail against major three-star resistance and the subsequent move below key support yesterday at 1289.8-1289.9 neutralized our near term expectations; the 50 and 100 day moving averages which are now at 1288.5-1291. We remain long term bullish, but traders must manage risk, a better than expected read on PCE will send prices lower. The lack of a near-term catalyst has kept the long-term bull case under wraps.

Bias: Neutral/Bullish

Resistance – 1288.5-1291**, 1304.7***, 1312.7-1316.4**, 1328-1329.4**

Support – 1268.1-1276***, 1262.8**

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Mining News