Gold's Momentum Is Still Strong
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Yesterday’s close: Settled at 1285.9, down 4.0
Fundamentals: Gold continues to battle at a key technical level in a very constructive manner. The metal faces a true test over the next 24 hours with a deluge of 2019 voting member Fed speak kicking off this morning with St. Louis Fed President Bullard who said that further interest rate hikes could push the economy into a recession and that they have achieved a good rate today. Chicago Fed President Evans is up next at 8:00 am CT and Boston Fed President Rosengren at 10:00 am CT (Atlanta Fed President Bostic, a non-voting member speaks at 7:20 am CT). The Minutes from the December meeting are released at 1:00 pm CT and tomorrow we look to Chair Powell and Vice Chair Clarida among Evans and Bullard again. As of this morning there is now a 10.9% probability the Fed hikes in March with the odds that they cut rates dissipating to zero.
The economic calendar has been bare given the government shutdown which in and of itself has been supportive to Gold but also brings a stronger emphasis to the Fed speak. On Friday, CPI data will be even more crucial.
Technicals: The great thing about today’s price action is that Gold is back above our momentum indicator this morning which comes in at 1284.4. Furthermore, the metal continues to hold first key support at 1278.1-1282.3. We have major three-star support at 1266.8-1270.3 and this is where we want to step in strong 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***