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Gold Doesn't Need Much To Push Higher

Commentaries & Views

Yesterday’s close: Settled at 1279.8, down 4.2

Fundamentals: Gold battled off yesterday’s lows and held ground in a terrific manner given yesterday’s strength. All it needed coming into today was a little support on the currency side in order to quickly find a path of least resistance higher. It began to find it last night as the Chinese Yuan gained on the U.S Dollar shortly after midnight on reports that lower-level Chinese delegates will arrive in Washington Monday to lay groundwork for talks between Chinese Vice Premier Liu He and U.S Trade Representative Lighthizer and U.S Treasury Secretary Mnuchin that begin Wednesday. The metal found a further boost this morning as a report for the Wall Street Journal began to gain traction; the Fed is considering an early wind-down of Quantitative Tightening. Luckily for the WSJ, Fed officials are in a black-out period ahead of next week’s meeting. We plan to follow-up on these reports in today’s Midday Market Minute.

Technicals: Gold is ripping this morning on fundamental news, however, it has been so extremely technically constructive over recent weeks. If you capitalized on strength above 1290, you had no hesitation to begin repositioning on some of the slight weakness that began to develop. First key resistance comes in at 1289.6-1292.3 and a close above there is bullish. Still, traders should look to capitalize against 1300 as Monday’s options expiration comes into the picture and is likely to keep the tape capped. Our momentum indicator comes in now at 1284.3 and will be a placeholder for new longs on the day.

Bias: Bullish/Neutral

Resistance: 1289.6-1292.3**, 1298-1300***, 1313-1320**

Pivot: 1284.3

Support: 1275.3-1278.1*, 1270.3**, 1260.8-1263***, 1250-1256.4**, 1245.3**, 1236.2-1236.7***

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