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U.S. Gridlock Bearish For USD, Positive For Gold

Commentaries & Views

Yesterday’s close: Settled at 1226.3, down 6.0

Fundamentals: The Dollar is broadly lower this morning after yesterday’s midterm elections confirmed the expected split in Congress. Historically, the Dollar loses value during such a period. The gridlock in Washington should end President Trump’s ease of executing his pro-growth policies. Furthermore, the House, now controlled by Democrats could investigate the conduct of the President or his staff. All of which is bearish for the Dollar and should attract the need for safe-havens such as Gold and Treasuries. Today’s economic calendar is bare, but Treasury yield have retreated, and traders look to a 30-year auction at noon today ahead of tomorrow’ Federal Reserve policy decision.

Technicals: We remain Bullish in Bias Gold on a technical and fundamental basis, but traders must understand two things. Despite a technical bull-flag setup, this is a seasonal weak time of year for the metal and strong resistance sits just above. We favor being long, but there are many ways to look to do this and capitalize on such, feel free to reach out to our trade desk at 312-278-0500.

Bias: Bullish/Neutral

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

Pivot: 1229.7

Support: 1224.9**, 1219.6-1221**, 1210.5-1213.2**, 1204.3-1205.9***

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