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Gold Remains Technically Strong

Commentaries & Views

Yesterday’s close: Settled at 1331.9

Fundamentals: Gold has done absolutely nothing wrong on a fundamental or technical basis for more than a month. A trader cannot fight this. That is why our Bias has remained unequivocally Bullish. However, we do believe that the Dollar is attempting to find some support at a level that can be seen in the Dollar Index at 90. The government will remain open until at least February 8th and dovishness on the Fed’s message has already mounted. As a bull, it is prudent to make sure you capitalize in one way or another with the ECB due out Thursday and the Fed next week sandwiched between key data points. The Bank of Japan left their policy unchanged last night, however, the Yen has firmed up since its low at midnight as the bank’s Outlook Report envisions inflation reaching their 2% target next year. This has been supportive for Gold. Richmond Manufacturing data is due at 9:00 am CT today and Chicago Fed President Evans, the second Fed dissenter speaks at 5:30 pm CT.

Technicals: Gold remains technically strong and pullbacks are extremely shallow. However, this does not change the fact that there is strong overhead resistance from 1350 all the way up to 1365. Support at 1326.6-1328 remains sticky and this is great for buyers. Traders should exude caution through the next week and a half. A close above 1365 will spark the next bull leg.

Bias: Bullish/Neutral

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

Pivot – 1334.9-1335.8

Support – 1326.6-1328**, 1321.6**, 1307.1-1308.9**, 1302-1303.4***

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