Christmas Comes Early As Gold Bulls Hold The Edge
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Yesterday’s close: Settled at 1432.2, up 4.7 on Friday and down 7.2 on the week
Fundamentals: December is now front month. Typically, you skip right over October, but it does bring a nice contract to use for hedges and on options strategies. In fact, our Trade Alerts limited-risk option strategy has an open trade in the October contract right now. Fed week is off to a quiet start and Gold is holding ground after battling better than expected GDP data on Friday. However, soft Core PCE, signaling inflation at 1.8% and below expectations that aligned with the Fed’s 2% target has been supportive to Gold. Manufacturing data last week was also a big disappointment, today we look to Dallas Fed Manufacturing at 9:30 am CT. The Bank of Japan wraps up a policy meeting tonight near midnight CT and should impact the currency and Treasury markets, thus Gold.
Technicals: Just because we roll into December which is trading at the crucial 1432.9 mark does not instantly create a breakout for Gold. We will keep this in our sights this week though and most specifically as the metal treks through the fundamental landmines of the Fed and Nonfarm Payroll; a weekly close for the December contract above 1432.9 will reinvigorate our Bullish Bias. Our momentum indicator is right there this morning and above 1432.9 the bulls have an edge, just as they do/did above 1420.2-1421.5 in the August contract. First minor support is at an intermediate trend line at 1428, however, we see Gold near-term constructive above the recent December low of 1423.9.
Resistance: 1432.9***, 1440.3-1440.8**, 1447-1454.4**, 1467**, 1484.5***
Support: 1428*, 1423.9***, 1410-1414.6***, 1400.5-1403.5***