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Gold Needs To Hold $1,256

Commentaries & Views

Yesterday’s close: Settled at 1267.9, up 11.5

Fundamentals: Gold is our only conviction, we have been unequivocally Bullish in Bias for months. The early read on data was a whiff; Core Durable Goods Orders came in at -0.3% when +0.3% was expected although last month was revised higher and the final Q3 GDP came in just below the 3.5% expected at 3.4%. At 9:00 pm CT, we look to the PCE Index the Fed’s preferred inflation indicator along with Michigan Consumer data and Personal Income and Spending components. Bill Baruch joined CNBC’s Trading Nation yesterday to discuss what safe-havens to look to when equity markets are in turmoil; although he pointed to the Treasury market, this is closely correlated with Gold and supporting factor to our Bullish Bias in the metal.

Technicals: First key resistance at 1268.3 has been sticky and yesterday’s high of 1270.3. Still, we believe that 1300 will be achieved in January. To maintain such a strong uptrend, Gold must hold first key support at 1256.4, today’s low was 1259.6. The trend line from the November low now aligns with Wednesday’s low at 1245.3; we find this area a strong buy opportunity upon a test. Our line in the sand that defines this uptrend comes in at 1236.2-1236.7. As Gold continues to hold out above 1256.4, Longs are historically under-positioned, and shorts are historically over-positioned, and this would act as a bullish tailwind upon higher prices.

Bias: Bullish

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

Support: 1250-1256.4**, 1245.3**, 1236.2-1236.7***

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