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Gold Needs To Break With Yuan

Commentaries & Views

Yesterday’s close: Settled at 1239.7, down 1.5

Fundamentals: Gold took the summer off and hasn’t looked back. One must believe that Fed Chair Powell’s two-day congressional testimony will encourage some volatility. Furthermore, uncertainty is not the only thing trade tensions have brought. Higher prices are slowing arriving because of such and we imagine Powell will take an approach that combats any belief the Fed will move more quickly to offset this; they have already called for two more hikes and December sits at 58%. The Fed Chair now has his sea legs underneath him and his June press conference was magnificent when compared to speeches earlier in the spring. If Gold can deter its focus from the Chinese Yuan, we imagine the metal would find itself higher in the latter half of the week. We are also eyeing Industrial Production data at 8:15 am CT.

Technicals: Price action continues to flirt with and fail to lift from our rare major four-star support. Gold must trade out above resistance at 1247.9-1248.8 to bring even the most modest life back to this market. Bears have been positioning and they are likely to defend ground until a move out above 1266.9.

Bias: Bullish/Neutral

Resistance: 1247.9-1248.8**, 1255.2**, 1266.9**, 1274.4-1274.6**, 1283.6-1286***

Support: 1238.3-1241.7****

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