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Gold Is Down But Not OUt

Commentaries & Views

Yesterday’s close: Settled at 1328.5, down 1.1

Fundamentals: Gold is trading lower but holding in a tight consolidatory range. Treasury prices are sharply lower today for no foreseeable reason other than stable data out of Europe. German 10-year Bund Yields are up sharply this morning to the highest level in two weeks. Confidence and Climate data from Europe over the last two sessions was much more stable than anticipated and showing a bit of a turn around. However, the Dollar is higher today (after the Euro finished strongly yesterday) and this creates a bit of a double whammy for the metal. On a positive note though, Gold continues to hold ground constructively. Today, we look to the trio of Congressional testimonies from Fed Chair Powell, U.S Trade Representative Lighthizer and President Trump’s former lawyer Cohen; all three could have an effect on currencies, yields and thus Gold. At 9:00 am CT we look to a key read on December Factory Orders and Pending Home Sales. We are surprised this morning that the metal has ignored escalating tensions between two nuclear countries; Pakistan and India. Keep an ear to the ground.

Technicals: Gold struggled to hold resistance at 1331.1-1332.5 and finds itself again testing major three-star support at 1321.7-1323.4, a level in which it has bounced twice in the last week. Although we remain unequivocally bullish Gold as long as it settles above the trend line from November or does not trade below the 1304.7 low, this third test is a bit of a disappointment. For now, we expect the bulls to respond.

Bias: Bullish/Neutral

Resistance: 1331.1-1332.5**, 1337-1340.1*, 1350**, 1369.4***

Pivot: 1327.2

Support: 1321.7-1323.4***, 1315***, 1304.7-1306.5****

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