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Price Action Continues To Support Higher Gold

Commentaries & Views

Yesterday’s close: Settled at 1327.2

Fundamentals: Gold has firmed up into today’s midnight budget deadline to keep the government open. The Dollar has been weak for weeks, months and all of 2017. The budget news is just the latest catalyst but let’s not interpret this as the only catalyst. Even if a deal is reached, we expect to see continued Dollar weakness. Traders should keep in mind that the next two weeks will be very critical for both the currency and Gold trade; next week is the ECB and the following week is a gauntlet of US data along with a Fed meeting. Michigan Consumer data is due at 9:00 am CT.

Technicals: Price action remains very favorable and this is undeniable. Pullbacks are shallow and short-lived. What is also undeniable is the overheated net-long position and a 14-day RSI that sits near 70 (though it saw some relief after yesterday). We remain unequivocally Bullish but because of this we have kept a slight Neutralization. Support levels were taken out yesterday and it did encourage a wave of selling, still, Gold has recovered very well into today. We are watching the 1335.8 level along with last week’s close of 1334.9; we would like to see the metal maintain this level on a closing basis. A move back below 1330.5 should spark a wave of selling. To the upside we have introduced another major three-star resistance at 1350, this is the trend line from the 2016 high that has slowly worked lower.

Bias: Bullish/Neutral

Resistance – 1340.9*, 1345**, 1350***, 1358-1365***

Pivot – 1334.9-1335.8

Support – 1330.5**, 1321.6**, 1307.1-1308.9**, 1302-1303.4***

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