A Correction In Gold Is Healthy
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Featuring views and opinions written by market professionals, not staff journalists.
Yesterday’s close: Settled at 1289.9, up 4.1
Fundamentals: Safe-haven assets are coming in a bit and this is a healthy correction from overbought territory. We have pounded the table that traders must lock or secure this rally in Gold citing that we like to capitalize on strength and not defend the weakness. Still, we remain unequivocally bullish Gold and view pullbacks as buying opportunities. The data front is light given the government shutdown, but JOLTs Job Openings are due at 9:00 am CT. Things shift into high gear tomorrow with the Fed Minutes from December and a deluge of Fed speak between tomorrow and Thursday including Fed Chair Powell. The Dollar is moving higher this morning after a big miss on German Industrial Production and this is putting pressure on Gold in the near-term. Risk-sentiment is favorable, and traders should remain patient to see if the S&P can test 2600. At that point Gold and Treasuries should prove to be a buying opportunity.
Technicals: Gold is pulling back into first key support at 1278.1-1282.3. It is currently below our momentum indicator at 1287.5 which confirms that it is consolidating lower. We have major three-star support at 1266.8-1270.3 and this is where we want to step in as buyers. A close back above the pivot today will leave the bulls the upper hand.
Resistance: 1295-1300***, 1313-1320**
Support: 1278.1-1282.3**, 1267.3-1270.3***, 1250-1256.4**, 1245.3**, 1236.2-1236.7***