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Gold Is Holding Its Ground

Commentaries & Views

Yesterday’s close: Settled at 1204.3, up 3.0

Fundamentals: Gold is battling at the 1200 mark this morning after Nonfarm Payroll beat expectations. Most importantly, Average Hourly Earnings came in hot at +0.4% MoM, annualized at 2.9%. Additionally, 201,000 jobs were added in August. The data has been very good recently when considering ISM as well. Gold was very undervalued at 1200 when the data was not there. While we still find Gold undervalued at 1200, the data is making its case but that does not mean there is a case for Gold to sustain itself below 1200. Boston Fed President Rosengren said this morning that the U.S is not well positioned if another recession hits. He added that the Fed should continue gradual rate rises as the economy grows. Essentially, implying that they must stay the course in order to have dry powder to respond to the next recession. We await what Fed members Mester 8:00 am CT and Kaplan at 11:45 am CT.

Technicals: Gold is holding ground very well at 1200 this morning considering the fundamental news. This is a great sign and signals that Gold has already incurred the worst of the selling. We must see a close above 1204 in order to keep the bears from taking the driver’s seat. First key support and major three-star support below there will be crucial through today’s session and the start of next week; if these hold given today’s data that would be very technically constructive.

Bias: Neutral

Resistance: 1210.9-1214.9**, 1220.7***, 1227-1228.5**, 1235.6**, 1244.6-1251.6***

Pivot: 1204

Support: 1193.9-1195.1**, 1187.6-1189.5***, 1178.5-1179.8**, 1167.1***

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