Gold Bears Are In The Driver's Seat Now
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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.
Resistance – 1288.5-1291**, 1304.7***, 1312.7-1316.4**, 1328-1329.4**
Support – 1268.1-1276***, 1262.8**