Dollar Keeping Gold Down Despite Trade-War Threats
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Yesterday’s close: Settled at 1280.1, up 1.6
Fundamentals: Gold is losing further ground this morning despite investors reaching for safe-haven assets such as Treasuries and the Yen. The metal is at the lowest level since December and it appears that Gold is less concerned about a trade war and more concerned with the rising Dollar and four hikes this year. Additionally, the technical landscape has gone from very constructive to extremely poor. Building Permits and Housing Starts are due at 7:30 am CT. St. Louis Fed President Bullard speaks this morning at 7:00 am CT but the major focus will be the ECB panel tomorrow with Draghi and Powell. This morning, Draghi was dovish emphasizing patience before hiking rates and only doing so gradually.
Technicals: Price action is moving below major three-star support at 1277.5-1278.3 which held last week’s selling in check. A close below here keeps the bulls in the driver’s seat. While we see only a minor level at 1267, there is a probably the biggest level of support we have seen in Gold since it neared $1000 that comes in at 1238.3-1250 we would be very surprised to not see buyers step in well in front of here.
Resistance: 1291.3***, 1299.6**, 1308.7-1313***, 1321**, 1332.4***Support: 1277.5-1278.3***, 1267*, 1238.3-1250****