FOMC Meeting Will Be A Turning Point For Gold
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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.
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***