Natural To See Profit Taking In Gold
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Yesterdayâ€™s close: Settled at 1331
Fundamentals: Gold gave back much of last weekâ€™s gains in its worst session in about a year. The recovery in the Dollar ahead of todayâ€™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 youâ€™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 todayâ€™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.
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***