Gold Needs To Close Above $1,291 To Undo Damage
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Yesterday’s close: Settled at 1277.2, down 14.1
Fundamentals: Two attacks in four session and Gold is below the 1280 floor. On the bright side, its not falling apart and holding ground fairly well. Better than expected data from China last night has lifted the Yuan and the metals sector broadly. The base metals are leading, but Silver is beginning to follow. The better data deters safe-haven demand and Treasuries are under pressure again, however, the Yuan strength is helping to offset this for Gold. U.S Trade Balance data was better than expected this morning, but the larger focus will be on February Wholesale Inventories, factoring into Q1 GDP, and a pair of Fed speakers. Philadelphia Fed President Harker speaks at 11:30 am CT and St. Louis Fed President Bullard speaks at 11:45 am CT.
Technicals: We must maintain the Neutral view on Gold in which we have held since a failed test to 1306.4. Gold is not falling apart; it arguably already has. Minor support comes in at yesterday’s low of 1275.5, today is a higher low. However, the longer it stays below 1280.8, larger the probability because that the metal tests our next major three-star support at 1255.8-1258.5. Only a close back above major three-star resistance at 1287.5-1291.9 will neutralize this immediate-term weakness.
Resistance: 1287.5-1291.9***, 1299.8**, 1306.4**, 1312-1314.7***, 1320.5**, 1330.3**
Support: 1275.5*, 1255.8-1258.5***