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Natural To See Profit Taking In Gold

Commentaries & Views

Yesterday’s close: Settled at 1331

Fundamentals: Gold gave back much of last week’s gains in its worst session in about a year. The recovery in the Dollar ahead of today’s FOMC Minutes is a key driver behind this move. Furthermore, one of the key drivers behind the Dollar is the Yen; this relationship must be watched if you’re trading Gold. Short-term Treasury yields traded the highest level since 2008 but we do not see this as a major headwind for Gold. Remember, Gold has been a beneficiary of inflation showing back up. Ultimately, in a week after the metal surged back to $1360 in a quick and surprising manner, it is expected to see profit taking. We Neutralized our Bias early Friday morning and our target in the Yen was hit Thursday night. Data and Fed speakers today are also key for the Dollar and Gold trade. Philadelphia Fed President Harker is due at 8:00 am CT. Manufacturing, Services and Markit Composite PMIs are due at 8:15 am CT and Existing Home Sales is at 9:00. FOMC Minutes are due at 1:00 pm and Minneapolis Fed President Kashkari speaks at 7:15 pm CT.

Technicals: Price action has taken out first and second key support. Below here is a level at 1319-1322.1 that we are watching closely through today’s session. This aligns with a weekly and daily trend line and a hold here will be critical for the immediate-term uptrend. Still, we remain unequivocally long-term bullish Gold and our rare major four-star support sits below there. This price action does not deter our long-term thesis.

Bias: Neutral/Bullish

Resistance: 1330.2-1331**, 1343.2-1344.9**, 1350.2-1351.3**, 1367.8-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1319-1322.1**, 1302.3-1309****, 1293.2***

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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