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Gold's Fundamental Battleground

Commentaries & Views

Yesterday’s close: Settled at 1203.5, down 5.1

Fundamentals: Gold is hugging the psychological $1200 mark but is seeing a light at the end of the tunnel through technicals and a reprieve in the Dollar’s strength. Still, today’s budget showdown between the EU and Italy will play a critical role in the tape. Furthermore, the next three days will bring a deluge of Fed speak. Fed Governor Brainard (permanent voter) and Minneapolis Fed President Kashkari both speak at 9:00 am CT. Philadelphia Fed President Harker speaks at 1:20 pm CT and San Francisco Fed President Daly, a voting member in December, speaks at 4:00 pm. Tomorrow and Thursday, both Fed Chair Powell and Fed Governor Quarles speak each day. Coming on the heels of PPI’s hot read and inflation around the world trying to poke its head, all eyes must be on CPI tomorrow morning. These next three days will be a fundamental battleground for Gold.

Technicals: Gold traded to a low of 1196.6 and this is crucial because it is a head-on test to major three-star support at 1197.2-1200. There is significant long-term value here for Gold, but the ride will not be a smooth one during this seasonally soft time of year. Additionally, below there, there is not much support until a retest to the October lows. Rally attempts can easily stall at first key resistance that aligns with the 50-day moving average but a close above here could bring a tailwind up to the 100-day moving average at 1221.9.

Bias: Neutral/Bullish

Resistance: 1213.1-1215.8**, 1221.9**, 1229.5**, 1233.5-1238.3**, 1244-1250***

Pivot: 1206.5

Support: 1197.2-1200***, 1184-1186***

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