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Gold Market Looks Constructive But Landscape Remains Uncertain

Commentaries & Views

Last week’s close: Settled at 1226, down 4.4

Fundamentals: Gold has been boosted by the positive news on the U.S and China trade front. Remember, the safe haven capabilities of Gold were diminished drastically by the U.S Dollar finding its own safe haven appeal with the weakening of the Chinese Yuan being a catalyst of such. The good news has taken some of that safe-haven wind from the Dollar’s sails and this has boosted Gold. Furthermore, the holes in the Fed’s hawkish armor are real and Gold finds itself at the highest level since November 7th. The week kicks off with Fed speak, there are no less than three speakers today. NY Fed President Williams is at 8:15 am CT, Fed Governor Brainard at 9:30 am CT and Dallas Fed President Kaplan at noon CT. We must look for any change in rhetoric given the sigh of relief markets are breathing on the trade pause. Today, we look to Manufacturing PMI at 8:45 am CT and the more closely watched ISM Manufacturing at 9:00 am CT.

Technicals: Last week we steadfastly expressed that we are unequivocally bullish Gold. Still, our narrative does not change it that rallies must be capitalized on in the first half of December and we have major three-star resistance at 1236.5-1239.3. The technicals are extremely constructive but uncertainty persists in the fundamental landscape with everything from the Fed to the jobs this week. We will look to dips as buying opportunities with first key support coming in at 1227.2.

Bias: Bullish/Neutral

Resistance: 1233*, 1236.5-1239.3***, 1250-1252***

Pivot: 1227.2

Support: 1220.5-1222.8**, 1215.5-1216.8**, 1202.4-1208***

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