Gold Still Under-Owned
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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.
Resistance: 1250-1252***, 1268.3**, 1295-1300***
Support: 1235.9-1236.7***, 1229.5-1230**, 1223**, 1216.8-1219.6**, 1202.4-1208***