Gold Bulls Got Exactly What They Wanted Wednesday
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Yesterdayâ€™s close: Settled at 1321.5 but extended gains in electronic session.
Fundamentals: Gold bulls got all they needed from the Federal Reserve yesterday; for them to keep the path of rate hikes this year projected at three. Traders and analysts had begun to project four hikes this year after new Fed Chair Jerome Powellâ€™s congressional testimony at the end of February. However, these expectations only inflated hopes in the Dollar, those of which were crushed yesterday. We discussed this perception in more detail in our FX Rundown last night. Poor data out of Europe early this morning has helped stabilize the Dollar trade slightly.
Technicals: Gold built a base at major three-star support at 1303.6-1308 leading up to the Fed meeting and played off this level extremely well early in yesterdayâ€™s session. The constructive manner of this chart sets the metal up for further gains. Price action has peeled back slightly, and we want to see a continued close out above 1329.8-1330.5 in order for this immediate-term momentum to remain unquestionably intact. Resistance does come in at 1341.2-1342.9 and a move out above here should encourage a path of least resistance to a trend line that comes in at 1353 today.
Resistance: 1341.2-1342.9**, 1351.3-1353**, 1367.8-1370***
Support: 1318.3-1321.8**, 1303.6-1308***, 1298.7****, 1291.5**