Fundamental, Technical Support For Gold
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Yesterday’s close: Settled at 1211.3, up 3.0
Fundamentals: The Dollar has pared some of yesterday’s losses and this has deflated the firm price action that began early last night. The Euro is slightly lower after Flash PMIs came in soft and the Chinese Yuan is slipping just a bit, probably on nerves ahead of the weekend and the implementation of tariffs on Monday. Although Gold traded higher for each of the last two sessions, its strength was subdued relative to the U.S Dollar’s weakness against the Euro and Pound. We still like Gold at these levels and believe there is fundamental and technical reasoning for it to trade higher. Today, we look to Flash PMIs from the U.S at 8:45 am CT and this will be critical for both the currency and Gold trade.
Technicals: The strong wave of resistance that we have referenced all week has held Gold back from further gains. This includes first key resistance at 1210.9-1214.9, the 50-day moving average which is lower today at 1214.8, last week’s swing high of 1218 and the recent high and major three-star resistance at 1220.7. To the downside, 1204 is still our pivot and we want to see a close above here to keep Gold immediate-term constructive.
Resistance: 1210.9-1214.9**, 1220.7***, 1227-1228.5**, 1235.6**, 1244.6-1251.6***
Support: 1193.9-1195.1**, 1187.6-1189.5***, 1178.5-1179.8**, 1167.1***