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Wind Spilling From Gold’s Sails As Economy Improves

Commentaries & Views

Yesterday’s close: Settled at 1400, down 0.1

Fundamentals: Gold has been pressured by a stable Dollar and the 10-year Note yield attempting to reject 2%. Friday’s strong job growth, particularly in the manufacturing sector, is mounting speculation that the U.S economy could be turning a corner, and this has taken the near-term wind out of Gold’s sails. Fed Chair Powell made the opening remarks at a Boston Fed conference this morning but did not speak on monetary policy or the economy. His two-day Congressional testimony that starts with the House Financial Services Committee tomorrow will be crucial in developing the Fed’s narrative and thus Gold, the Dollar and rates. St. Louis Fed President Bullard then speaks at 9:10 am CT and Fed Governor Quarles speaks at 1:00 pm CT, both are 2019 voting members. Atlanta Fed President Bostic also speaks at 1:00 pm CT. JOLTs Job Openings are due at 9:00 am CT.

Technicals: Price action is facing first key support at 1389.3-1392.6. Below there we have major three-star support at 1377.5-1380.3, a level that Gold held in last week’s drop and one that defines this recent bullish breakout above the 5-year ceiling. Above these two levels of supports, the tape is painting a constructive pullback from overbought conditions. A close back above 1401.7-1406.9 is near-term bullish again.

Bias: Neutral/Bullish
Resistance: 1401.7-1406.9***, 1413.7-1418.2**, 1432.9***, 1484.5***
Support: 1389.3-1392.6**, 1377.5-1380.3***, 1361.5***

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