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Gold Needs To Close Above $1,340

Commentaries & Views

Yesterday’s close: Settled at 1340.1, up 4.0

Fundamentals: Gold is holding firm this morning after fighting off minor weakness overnight on reduced trade war fears. Chinese President Xi Jinping promised to lift limits on foreign investments, reduce tariffs on products such as autos and work to fight intellectual property theft. Still, there was little substance and we must see this hashed out between the U.S and China. The news that the FBI raided the office of President Trump’s lawyer, Michael Cohen, and rising geopolitical tensions with Iran and Russia due to the Syrian conflict have kept the safe haven bid alive and well. We expect headlines today to be readily updating both. The Dollar trade will also remain critical; it began moving lower again on Friday and extended losses yesterday. Hawkish comments from ECB official Nowotny has again added pressure. Tomorrow will be critical as we await the closely watched CPI in the morning and FOMC Minutes in the afternoon.

Technicals: Price action has nudged out above first key resistance at 1339.6-1340.2, we must now see a close above here. While we watch this level closely, above here is a trend line from recent highs at 1344 that poses minor resistance on the session. The chart remains extremely constructive and we believe this is building for a breakout above the wall at major three-star resistance at 1367.8-1370. First key support now comes in at 1331.8-1334.2 and this level will be absolutely crucial, a close below here will begin to signal a near-term failure.

Bias: Bullish

Resistance: 1339.6-1340.2**, 1344*, 1353.8**, 1360**, 1367.8-1370***, 1375.5**, 1392.6**, 1427.2***

Support: 1331.8-1334.2**, 1325.4**, 1312.4-1316.6***, 1304.6***

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