Will Shifting Growth Landscape Weigh Down Gold
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Featuring views and opinions written by market professionals, not staff journalists.
Last weekâ€™s close: Settled at 1412.2, up 5.5 on Friday and up 12.1 on the week
Fundamentals: This is an ideal landscape for Gold, the most prominent question is whether U.S growth is beginning to turn a corner. This would be a story pricing down Fed rate cut expectations, firming the U.S Dollar and lifting Treasury yields. Todayâ€™s NY Empire State Manufacturing, although nothing to write home about, did come in better than expected. We will hear what NY Fed President Williams has to say at 7:50 am CT. This morning, the odds of a 50-basis point cut on July 31st sit at their highs at 27%. Global growth is now starting to show its first bright spots, the question is whether this is a dead-cat bounce or something more. We view three (months or one quarter) as a trend. Last week, Eurozone Industrial Production was less-worse than expected. Data out of China last night was much stronger than expected headlined by the pace of growth in Industrial Production.
Technicals: Price action ripped strongly higher into Thursdayâ€™s session before settling in a bit. The tape is remarkably firm and in a healthy wedge consolidation pattern and given that this wedge is holding the breakout above its 5-year ceiling, its is overall very bullish for the long-term. Still, we must continue to see a constructive technical landscape upon pullbacks, and we look to be seeing the latest consolidation back now after first key resistance at 1420.5-1420.9 held overnight. Holding and hugging 1408-1408.5 on a closing basis is very bullish.
Resistance: 1420.5-1420.9**, 1432.9***, 1484.5***
Support: 1408-1408.5***, 1400.5-1403.5**, 1389.3-1392.6**, 1377.5-1380.3***, 1361.5***