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FOMC Meeting Will Be A Turning Point For Gold

Commentaries & Views

Last week’s close: Settled at 1248.8, the lowest level since July.

Fundamentals: Price action did notch a new swing low on Friday’s session, trading to 1244.4. Headline job growth and a strong equity market put pressure on the metal, but we are optimistic once again. We have been eyeing this week’s FOMC meeting as a key turning point for Gold and we discussed it on last night’s Tradable Events this Week. Though it might not spike and begin a leg higher Wednesday afternoon, this event is one of two that we must get through in order to bottom out. The second is tax-reform and this week will be key as congress paves the way to put a bill in front of the President before Christmas. JOLTs Job Openings is due at 9:00 am CT and we have a 10-year note auction at noon. Tomorrow will be key with PPI.

Technicals: Last week’s blood bath for Gold was exactly what it needed. The supply/demand technicals and the overextended long side sparked the cleansing that we have been waiting for. The net-long position was reduced by exactly 1/3. Furthermore, longs decreased their holdings to the lowest level since the week of August 8th and the shorts increased their holdings to the largest level since August 1st. Wow! What a difference a week can make. Let us remind you that the first week of August was the beginning of a $100 rally and an ascent of 8% in Gold. Call our trade desk at 312-278-0500 as we consider the time frame we expect Gold to recover to our first upside target of 1304.7 and eventually breakout; we are working to put together an option strategy that is best suited for this.

Bias: Bullish/Neutral

Resistance – 1262.8-1263.2**, 1273.9-1276.8***, 1289**, 1303.4-1304.7****

Pivot – 1250.2

Support – 1248.8*, 1244.4**, 1214.5-1225***

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.
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