Gold Holding It's Ground Despite Disappointing Price Action
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Yesterday’s close: Settled at 1341.9, down 18.1
Fundamentals: Yesterday was about as disappointing as it gets for us bulls without Gold violating its constructive uptrend. Price action traded to a high of 1369.4 on Wednesday but again flat out failed to hold ground above 1360; major three-star resistance was 1367.8-1370. A combination of hawkish FOMC Minutes and weak Eurozone data has kept a bid under the U.S Dollar and this has added direct pressure to Gold. Additionally, a quick reduction in geopolitical tensions from the Syria conflict and trade tensions between the U.S and China has taken the air out of the balloon. Despite news yesterday that the U.S is expected to strike Syria, Gold traded lower into the electronic close. This is likely due to margin selling as the settlement price was already set in place at 12:30 pm CT and those who chased Gold above 1350 or higher were likely forced to sell. Fed speak today will be crucial; Federal Reserve President Rosengren from Boston speaks at 7:00 am CT, Bullard from St. Louis speaks at 8:00 am CT and Kaplan from Dallas at noon CT. JOLTs Job Openings data is due at 9:00 am CT along with the first look at April Michigan Consumer data.
Technicals: We remain unequivocally long-term bullish Gold, but this week was a prime example in which traders CANNOT sit on their hands and must capitalize on strong moves. Price action took out first and second key support levels yesterday and we will minimally look to a close above 1340.5 today in order to neutralize this wave of weakness. Below here, support at 1331.8-1333.7 must hold in order to keep the tape constructive on the week. Only a move out above 1348.8 will turn the tape immediate-term bullish again.
Resistance: 1348.8**, 1356.7-1358.4**, 1367.8-1370***, 1375.5**, 1392.6**, 1427.2***
Support: 1331.8-1333.7**, 1322.4-1325.4**, 1312.4-1316.6***, 1304.6***