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Gold Could Be Sensitive To Passing Tax Reform

Commentaries & Views

Yesterday’s close: Settled at 1265.5

Fundamentals: Gold continues to show life as longs reposition on U.S Dollar weakness. The bottoming process seems to have happened quickly and though we are Bullish, traders must remember that tax-reform could move to the President’s desk in about 48 hours. When this is done we expect to see a marginal bump up in the U.S Dollar, and this will give Gold bulls who missed the buy last week a second chance. We are entering a very seasonally bullish time of year for the metal, ultimately, one that does not start until December 23rd. There are several key data points we must watch this week, and this begins with today’s housing reads at 7:30 am CT. For us, the biggest reads come on Friday with PCE, Durable Goods and Personal Income and Spending data. Fed dissenter Neel Kashkari spoke this morning. As expected, he was dovish and said there is no reason to raise rates while inflation is low and falling. He added concern on wage growth and how the long end of the yield curve hasn’t moved. This has helped support Gold prices.

Technicals: Price action has taken out resistance at the 1262.8-1263.2 level, settling at 1265.5 yesterday. Major three-star resistance comes in at 1273.9-1276.9 and we find it very hard to believe that Gold will chew through here on the first test. If you bought last week when we turned Bullish, we would advise trading and taking profit against this level and look to reposition into the end of the week.

Bias: Bullish/Neutral

Resistance – 1273.9-1276.9***, 1289**, 1303.4-1304.7****

Pivot – 1262.8-1263.2

Support – 1247-1250**, 1237-1241.7**, 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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