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Gold’s Upside Could Be Limited Near Term

Commentaries & Views

Last week’s close: Settled at 1289.5, up 2.1 on Friday and up 3.7 on the week

Fundamentals: Gold is holding well at the 1290 area as it stares down the psychological $1300 barrier. There is a lack of economic data to boost or dissipate recent gains for the metal but misses around the globe, specifically China and the Eurozone, continue support a slower growth environment which is favorable for the metal. Earnings season is underway, and this will also be a way to keep a pulse on growth. Today’s calendar is bare but tomorrow, despite the government shutdown, we get PPI and NY Empire State Manufacturing along with Fed speak. We remain bullish Gold, but the near-term upside may be limited.

Technicals: Price action is gyrating around our momentum indicator at 1291.4; a continued close above here will keep the bulls with an upper hand. Pullbacks have been viciously bought and this can be seen with the speed of each recovery and the lack of depth to each selloff. While we favor buying dips, there is some need for patience in waiting for major three-star support at 1265.3-1270.3 for better value.

Bias: Bullish/Neutral
Resistance: 1298-1300***, 1313-1320**
Pivot: 1291.4
Support: 1278.1-1282.3**, 1265.6-1270.3***, 1250-1256.4**, 1245.3**, 1236.2-1236.7***

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