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Neutral Signals Flash As Gold Prices Unable To Rally

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Yesterday’s close: Settled at 1294.2, down 4.3

Fundamentals: Yesterday was a risk-on session and Treasury prices led Gold lower. As discussed in the S&P section, those Treasuries have been on a tear higher and sentiment was becoming overdone. Although it is not surprising to see the bullish reaction to less-worse China data, the move in Treasuries is certainly dragging on Gold despite a quiet Dollar. The Dollar has not accelerated higher and the data overall yesterday was not robust; Retail Sales, Manufacturing PMI and Business Inventories all missed. Durable Goods is due at 7:30 am CT and we look ahead to a crucial Nonfarm Payroll report Friday; traders should stay cautious into such.

Technicals: We went Neutral on Gold yesterday after a failure Friday to get out above major three-star resistance at 1306.4. At best, the metal consolidates for a bit. We remain long-term upbeat, but traders must understand a break below major three-star support at 1280.8-1287.5 is bearish.

Bias: Neutral

Resistance: 1306.4***, 1311*, 1315.7-1316.9***

Pivot: 1299

Support: 1280.8-1287.5***

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