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Now Is the Time To Be Bullish On Gold

Bill Baruch

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

Yesterday’s close: Settled at 1194, down 4.3

Fundamentals: Gold is extremely constructive this morning. Despite a weak close yesterday price action has recovered in a very firm manner this morning. After trade talks between the U.S and China yielded nothing of substance, traders attempted to front-run the weakening of the Yuan. NOT SO FAST! The Yuan has strengthened this morning after their central bank announced the use of “counter-cyclical factors in the Yuan midpoint-fixing mechanism”. This is something that they brought to the forefront last May and the Yuan strengthened then. Commodities across the board have responded and this will be a crucial trend change if it holds.

The week’s main event is Fed Chair Powell’s keynote speech at Jackson Hole at 9:00 am CT. The Dollar Index is about 2% from last week’s high on what we have called a capitulation of sentiment upon safe-have flight. We expect him to reiterate that inflation is not running away and the Dollar to finish the session lower; this should support what is already a very constructive session for Gold.

Technicals: WE HAVE TURNED OUTRIGHT BULLISH IN GOLD AND ALL METALS FROM PRECIOUS TO BASE. We must see today’s momentum hold into settlement, but this could have been a major turning point in the technical and fundamental landscape. Yesterday’s dips have been rejected, creating a bullish handle-like pattern against lower price action across the board. Gold maintained a close above major three-star support at 1192.6 yesterday and this was also technically constructive though it did dip below in the afterhours. A close above 1204 today would be good to see but we need a close above 1210.7-1212.5 to light a fire under this complex.

Bias: Bullish

Resistance: 1204**, 1210.7-1212.5***, 1227-1228.5**, 1235.6**, 1244.6-1251.6***

Pivot: 1198.6-1198.9

Support: 1192.6***, 1187.8**, 1179.7-1182.8***, 1167.1**, 1123.9***

By Bill Baruch

Contributing to kitco.com

Contact info@bluelinefutures.com.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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