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Gold's Path Of least Resistance Is Down For Now

Commentaries & Views

Yesterday’s close: Settled at 1299.4, down 3.8

Fundamentals: Gold held very well yesterday given the solid to marginally better than expected CPI read ahead of today’s FOMC Meeting. We discussed yesterday that the risk in the near-term for Gold is to the downside as it is very likely we could see the Dollar increase after they hike rates today in a more hawkish manner than expected. However, we see that risk as limited as we expect the Euro to finish the week stronger following the ECB policy meeting early tomorrow morning. Essentially, patience should win out and dips are a buying opportunity. PPI data is due at 7:30 am CT, the Fed releases their policy statement at 1:00 pm CT and Fed Chair Powell follows with a press conference at 1:30 pm.

Technicals: The struggle is real for the metal, it cannot not get above major three-star resistance at 1308.7-1309.6. Still, given these difficulties, Gold has come back after each drop to cling to our pivot level. While we remain longer-term Bullish in Bias because we believe that dips are buying opportunities, however, traders must be cautious in the near-term as we could see a test into the mid and low 1280’s.

Bias: Bullish/Neutral

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

Pivot: 1297.9-1299.9

Support: 1293.1*, 1286.8**, 1277.5-1278.3***, 1247.2-1250****

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