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Gold Could Get A Boost If Fed Shows Concern About Rising Volatility

Commentaries & Views

Yesterday’s close: Settled at 1228.7, up 2.4

Fundamentals: Given the overnight price action coming into yesterday, Gold posted a disappointing session. The Dollar has broadly worked higher during the same time from and though the Dollar Index is not accelerating, commodities are broadly lower. The Chinese Yuan is 0.2% weaker this morning despite strong Trade Balance data out of China. The Federal Reserve’s policy decision is due at 1:00 pm CT and though there are no economic projections or press conference, the statement will be looked at closely for any hints towards their path of hiking in 2019. If the Fed shows any concern due to recent volatility, weakening commodity prices over the last month or uncertainties for growth, look for Gold to respond.

Technicals: Gold is testing into key support at 1219.6-1221 this morning. It has held the 100-day moving average at 1224.2 on a closing basis but is now below here. It will be crucial to see how Gold reacts to this support level and overall its recovery path from November 1st. The metal traded to a lower high and failed at 1233.5-1238.3; it appears that seasonals are keeping it depressed and we are cautious in the near term though remain upbeat in the longer picture.

Bias: Neutral/Bullish

Resistance: 1229.5**, 1233.5-1238.3**, 1244-1250***

Pivot: 1224.2

Support: 1219.6-1221**, 1210.5-1213.2**, 1204.3-1205.9***

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