It Will Take Time To Repair Technical Damage In Gold Market
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Yesterday’s close: Settled at 1293.3, down 20.6
Fundamentals: Gold’s bloodbath yesterday is showing signs of trying to stabilize on Dollar weakness. Less-worse Eurozone Industrial Production and upbeat Exports from China have taken safe-haven winds out of the Dollar, however, they have added pressure to Treasuries. On a positive note, Gold is stabilizing amidst this tug-of-war, but still remains vulnerable due to yesterday’s technical damage. Pressure kicked-in early on the metal yesterday ahead of a deluge of Fed speak. In the aftermath, we have now seen the probability that rates stay unchanged this year jump to 60.3%. Fresh April Michigan Consumer data is due at 9:00 am CT and this will ultimately set a tone to finish out the week.
Technicals: There is no beating around the bush, yesterday brought immense technical damage. The disappointing factor was the selling came in front of trend line resistance and on the heels of an upbeat close. We began Neutralizing our Bullish Bias here as price action began edging lower. There will be some headwinds to repair this damage. On the bright side, Gold held support at 1291.9 and there is strong support just below; it is time for bulls to defend the tape and a close back above 1299.8 today would do just that.
Resistance: 1299.8**, 1306.4**, 1312-1314.7***, 1320.5**, 1330.3**
Support: 1291.9**, 1280.8-1287.5***