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A Tremendous Landscape for Gold

Commentaries & Views

Yesterday’s close: Settled at 1400.5, up 0.5

Fundamentals: Gold is up strongly this morning and about $20 from its overnight low after the release of Fed Chair Powell’s prepared Congressional testimony that reiterated the Fed will “act as appropriate” to sustain growth. Pre-release, according to the CME’s FedWatch tool, there was a 4.4% probability the Fed left rates unchanged at their July 31st meeting. This was the first time the dial for unchanged moved off zero in about a month. These odds have now dissipated completely, and his remarks reinvigorated the probability of a 50-basis point cut to 21.4%. With a weaker Dollar, this is a tremendous landscape for Gold. Does it stick through today’s Congressional questioning, the testimony begins at 9:00 am CT? Traders should stay nimble also knowing that the FOMC releases the Minutes from their June meeting at 1:00 pm CT and a critical CPI read is due tomorrow morning at 7:30 am CT.

Technicals: Today’s move is everything Gold bulls could hope for now that price action is out above 1408. This begins with a higher low on this wave compared to that from July 1st. Now we must see this price action hold on a closing basis as it faces first key resistance at 1414.3. A close back below 1400.5-1401.7 will signal a potential near-term failure.

Bias: Bullish/Neutral

Resistance: 1408***, 1414.3**, 1420.5-1420.9**, 1432.9***, 1484.5***

Pivot: 1400.5-1401.7

Support: 1389.3-1392.6**, 1377.5-1380.3***, 1361.5***

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