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This Week Is A Critical Test For Gold

Bill Baruch

Kitco Commentaries | Opinions, Ideas and Markets Talk

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

Commentaries & Views

Last week’s close: Settled at 1200.4, down 3.9 on Friday and down 6.3 on the week

Fundamentals: Average Hourly Earnings beat expectations on Friday coming in at 0.4%. This was the first beat since May and the highest since December’s revision to the same mark. The Dollar Index gained only 0.36% on the session and Gold did not spike $10-15 lower. We believe this speaks very loudly to Gold’s bottoming process in that the sellers have already sold. Gold could not gain fresh selling even from the algos upon Friday’s very good jobs report. This will be a critical week for the metal and there is now a tremendous emphasis on Thursday’s CPI inflation read. The Chinese Yuan is weaker today and likely holding back the metal. This comes despite strong than expected CPI and PPI from China last night. However, this was likely offset by China’s Trade Balance data Friday night showing a new record surplus to the U.S; this assumingly does not help trade negotiations.

Technicals: Gold settled below the 1204 mark on Friday and the weakness into this morning is unfavorable. Still, first key support is holding, and major three-star support sits just below. Gold is testing into a critical level, one in which will define the recent constructiveness at the psychological $1200 mark. We are upbeat until major three-star support gets taken out.

Bias: Bullish/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***

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.
Batman