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Gold Still Under-Owned

Commentaries & Views

Last week’s close: Settled at 1241.4, down 6.0 on Friday and down 11.2 on the week.

Fundamentals: Gold recovered very well through Friday’s session. Early strength in the U.S Dollar Friday morning due to poor data in Europe settled out after data in the U.S data also fell short of expectations. Overall this paints a strong picture for Gold heading into Wednesday’s FOMC meeting and a seasonally bullish time of year for the metal. Furthermore, the final read on Eurozone CPI was soft this morning and NY Empire State Manufacturing also missed. The Dollar is struggling at its highs of the year, a level of technical significance over the long-term.

Technicals: Friday’s dip against major three-star support could not have proven to be a better buy opportunity and one that justified our rhetoric that traders must capitalize at and above 1250 in order to be ready to buy again at our level. Look for major three-star support at 1235.9-1236.7 to hold as the week develops to lay extremely constructive ground for Gold to rip higher in the coming weeks. We are outright Bullish and while longs are under positions and shorts over positioned, there is still a Managed Money net-short position of 66 contracts. We believe this could provide a tailwind higher the next time it closes above 1250-1252.

Bias: Bullish

Resistance: 1250-1252***, 1268.3**, 1295-1300***

Support: 1235.9-1236.7***, 1229.5-1230**, 1223**, 1216.8-1219.6**, 1202.4-1208***

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.