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Gold Continues To Battle Higher But Lock In Your Gains

Commentaries & Views

Yesterday’s close: Settled at 1309.3, up 5.1

Fundamentals: We cannot bring ourselves to reduce our Bullish Bias in Gold, something that we have had for months. Simply put, Gold continues to battle higher, the market is bullish. However, this does not mean we are not capitalizing on Gold with our clients. On Friday, we even encouraged buying the strength and to capitalize on those at the $1300 mark. The metal has now broken out above $1300 and we have prepared our client-base since Friday for the call they received this morning; to exit all remaining Gold. We see the next 24 to 72 hours as a very uncertain landscape and believe we would be foolish to not lock in such a move. Because of Friday’s Wall Street Journal article that claims the Fed is weighing the end of their balance sheet unwind known as Quantitative Tightening, the pendulum of perception now expects the Fed to take a step into dovish territory. Right now, there is only a 1.3% probability that the Fed hikes in March. We believe this is underestimating their rhetoric that stays the current course. For this reason, we believe there will be ample opportunities to reposition in the coming days and next week. U.S Consumer Confidence for January is due at 9:00 am CT and the expectations are already lowered to a level last seen one year ago.

Technicals: Gold jumped this morning after the cap of February options expiration was lifted yesterday at settlement. Yes, despite advising our clients to take all profits in Gold for the moment, we do remain Bullish; you cannot fight this tape. In fact, the tape remains immediate-term bullish above 1309.5-1313; a close below here will encourage a consolidation back down to the 1298.1-1300 which could present a buying opportunity.

Bias: Bullish/Neutral

Resistance: 1321.7-1323.4***, 1337**

Pivot: 1309.5-1313

Support: 1298.1-1300***, 1289.5-1292.1***, 1281.5**, 1267.5-1268.3***

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