Weak USD Driving Gold Up 1%
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Yesterday’s close: Settled at 1215, down 10.3
Fundamentals: Gold is ripping this morning, up more than 1% and being driven by a weaker Dollar. Interesting enough, the Dollar is not truly weaker on its own accord but instead for the same reason it has been higher; weakness in its pairs has turned into strength this morning. Most importantly the Chinese Yuan was fixed better, gaining more than 0.50% against the Dollar this morning. This could lead to a move. The British Pound is up more than a penny after the Bank of England’s policy meeting and less negative news on the Brexit front. The Euro is using this as a tailwind after CPI data was strong than expected yesterday. U.S weekly Jobless Claims missed the mark this morning although Unit Labor Costs were better, Nonfarm Productivity was in line. Nonfarm Payroll tomorrow will truly dictate the weekly close for Gold.
Technicals: Yesterday, Gold traded perfectly down to first key support at 1210.5-1213.2 with a low of 1213.4 before bouncing in the overnight. The firm strength back above 1219.6-1220.7 certainly neutralizes any weakness but now the move back above the 100-day moving average at 1227.8 has placed the bulls back in the driver’s seat. Strong resistance does come in at 1233.5-1238.3, a wide pocket that Gold struggled to hold on rallies over the last few weeks.
Resistance: 1227.8-1229.7**, 1233.5-1238.3**, 1244-1250***
Support: 1210.5-1213.2**, 1204.3-1205.9***