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Gold On The Back Foot

Commentaries & Views

Yesterday’s close: Settled at 1413.5, up 1.3

Fundamentals: Gold is on its back foot this morning after another failure to regain first key resistance and a better than expected Retail Sales number. Still, Silver and Platinum are both holding strongly, and this is working to offset Treasury weakness and Dollar strength weighing on the yellow metal. In fact, Platinum is at two-month highs. Industrial Production underwhelmed and we look to May Business Inventories at 9:00 am CT. Dallas Fed President Kaplan who votes next year speaks at 11:20 am CT. Fed Chair Powell, largely the catalyst in mounting rate-cut expectations after his dovish Congressional testimony last week speaks at noon CT. Chicago Fed President Evans, a voter this year, wraps things up at 2:30 pm CT and this former dove should be watched closely; in a speech last week, he saw only two rate cuts this year. After the better Retail Sales data, the probability of a 50-basis point cut later this month dropped from 32% to 26%.

Technicals: Although we have been more Neutral Gold since the move overnight last Wednesday, our longer-term thesis remains unequivocally bullish. The last two Tuesday’s have brought strong buying volume for the metal around 9:00 am CT; let’s see if this trend continues. Price action is lingering below our 1413.4-1414.3 pivot but as long as supports hold, the path remains constructive.

Bias: Neutral/Bullish

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

Pivot: 1413.4-1414.3

Support: 1408-1408.5***, 1400.5-1403.5**, 1389.3-1392.6**, 1377.5-1380.3***, 1361.5***

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