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Gold Is Ripping Higher As Markets See 50 bps Cut In July

Commentaries & Views

Yesterday’s close: Settled at 1418.2, up 18.1

Fundamentals: Gold ripped higher overnight marking the fourth session in a row, all after the Federal Reserve’s dovish statement last Wednesday. With the odds for a 50-basis point cut on July 31st ballooning to 40.5%, and the Dollar slipping below a key level of technical support; as we said last week, this is an ideal landscape for the metal. Adding fuel for this rally are escalating tensions and uncertainties in the Middle East. Today’s calendar is packed and will play a key role in helping Gold hold these gains or encouraging a healthy consolidation. NY Fed President Williams did not comment on policy this morning, it looks as he will leave that to Fed Chair Powell at noon CT. Case Shiller Home Price Index underwhelmed at 8:00 am CT. Consumer Confidence is the highlight this morning at 9:00 am CT and New Home Sales is also due then.

Technicals: Gold is up 10% this month and now testing the August 2013 high at 1432.9. We imagine that such a straight shot will run into a bit of technical headwind as shorts have already covered, and FOMO buyers have already chased. We see no reason for Gold to fail here and do not like shorting the metal but are simply exuding caution. In fact, our Trade Alerts Options program released an options strategy to get long exposure in Gold yesterday, contact our trade desk to discuss. This market can pullback to 1414.4-1418.2 and remain extremely healthy and the bulls are in the driver’s seat until a close below 1400.1.

Bias: Bullish/Neutral

Resistance: 1432.9***, 1484.5***

Support: 1415.4-1418.2**, 1400.1***, 1392.6***, 1377.5-1380.3***, 1361.5***

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