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Gold Investors: Watch USD Reaction To Fed Minutes

Commentaries & Views

Yesterday’s close: Settled at 1273.2, down 4.1

Fundamentals: Gold is certainly not going down without a fight. Despite lower lows yesterday it is buoying above that set on May 2nd ahead of today’s FOMC Minute. Ultimately, the 1:00 pm CT release will be all about the reaction of the Dollar and rates. Remember, at this meeting Fed Chair Powell called slowing inflation growth transitory. This implied he expects inflation to pick up later this year. If that occurs, it would foreseeably price-out any chance of a rate-cut as long as growth is steady. Dallas Fed President Kaplan said in an interview with Bloomberg that the Fed may have “slightly overdone it” when referring to the December hike. On this flip side, maybe the inflation comments were added by Powell and not reiterated much within the discussion, this could support Gold. Regardless, the Dollar is finding more support from the weakness of its peers; Euro, Yuan and Pound. Traders must keep a close eye on the 98.00 mark for the Dollar Index.

Technicals: We remain Neutral in Gold but see tremendous value at 1255.8-1258.5. For now, price action is battling above another strong level of support aligning with previous lows at 1264-1267.9. Above the pivot will keep the bears from pressing shorts but only a close above 1285.1 will neutralize this weakness.

Bias: Neutral

Resistance: 1280.5**, 1285.1***, 1289-1292.4**, 1301.5-1304.2***

Pivot: 1273.3-1275.7

Support: 1264-1267.9***, 1255.8-1258.9***

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