Gold Bulls Are Nervous
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Yesterday’s close: Settled at 1309.3, down 11.2
Fundamentals: Gold has been under heavy pressure into this morning despite only a small uptick in the Dollar Index as well as the Dollar/Yuan. Gold did rally ahead of yesterday’s Brexit Vote and although the results were expected, it seems to be coming in now that the deadline will officially be extended. Overall, there also seems to be rising concerns that a trade deal between the U.S and China will be harder to reach than recent headlines have eluded to. From this, we believe Gold bulls are very nervous to get caught in a similar downdraft as last year. We do not find this to be the case given the 180 from central banks around the world. Although we remain unequivocally bullish Gold long-term, this tape does exude a that bulls should be patient. Initial Weekly Jobless Claims came in a bit higher than expected while Import/Export Price Index was slightly better. New Homes Sales and the NAHB Housing Index is due at 9:00 am CT.
Technicals: Gold pushed to a high of 1311.6 post-settlement yesterday and ahead of the Brexit vote. There was strong sell-volume early in U.K hours this morning and price action is back below a significant level at 1298.1-1299.2. Despite the close at 1309.3 and above 1307.2, price action has been rejected in the near-term. Gold must begin to repair this damage by holding first key support at 1291-1293.5 today.
Resistance: 1304.7-1307.2***, 1315.3**, 1323.4-1326***
Support: 1291-1293.5**, 1273.2-1280***