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Gold Still Has Potential

Commentaries & Views

Yesterday’s close: Settled at 1297.3, down 2.0

Fundamentals: Gold has held ground well near the $1300 mark given the strong data to finish last week. Though the Dollar Index remains about 1% from its recent high, Treasury yields have inched up in recovery after last week’s Italian crisis; these offset each other. However, Treasury yields are dissipating this morning just a slight bit as trade tensions are in the news and Italy’s PM faces parliament. Today brings the two biggest data points of the week at 9:00 am CT in ISM Non-Manufacturing and JOLTs Job Openings. Services and Markit Composite PMIs come out first at 8:45 am CT. Next week, the Fed, Bank of Japan and ECB each have policy meetings.

Technicals: Price action clung to first key support once again on a settlement basis. The metal is showing signs of technical potential but the strong barrier at major three-star resistance persists; a close out above here will invite the buyers. At this point, a consolidation that can hold ground is a positive and we believe the metal will fundamentally benefit over the coming weeks.

Bias: Bullish/Neutral

Resistance: 1308.7-1309.6***, 1315**, 1321**, 1332.4***

Support: 1297.9-1299.9**, 1286.8**, 1277.5-1278.3***, 1247.2-1250****

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