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Risk-Off Sentiment Flourishing, Gold Benefiting

Commentaries & Views

Yesterday’s close: Settled at 1225.3, up 2.3

Fundamentals: Gold is trading strongly this morning and following Treasury prices higher as risk-off sentiment flourishes in the face of the tech bloodbath. Though the Dollar Index is nudging green, it is still about 1.25% from its failed high last week and we have begun to see a crack in the Fed’s hawkish armor. The Chinese Yuan is also holding onto last week’s paring of losses against the Dollar. Still, there is strong technical resistance overhead that we will discuss in the ‘Technical’ section below. Building Permits and Housing Starts were overall better than expected on the heels of what has been poor housing data. Traders should be vigilant to currency volatility tied to Brexit and Italy as the day develops.

Technicals: We remain Bullish Gold now and in the long-term, however, traders must understand that major three-star resistance sits overhead at 1229.5. This aligns multiple technical indicators as well as a trend line from the recent 1246 high. Risk must be managed, in fact, as we said in yesterday’s Midday Market Minute video, we want to see clients take profits on rallies and be ready to buy dips over the next month. Strong support now comes in at 1215-1219.4 and this aligns with the 50 and 100-day moving averages.

Bias: Bullish/Neutral

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

Support: 1215-1219.4**, 1206.5-1207.1**, 1197.2-1200***, 1184-1186***

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