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Gold Still Enjoying A Favorable Landscape

Commentaries & Views

Yesterday’s close: Settled at 1509.5, down 10.1

Fundamentals: Gold is off the overnight high in what is a largely constructive fundamental and technical landscape. A tweet in the second half of the day by President Trump on Iran seemed to light a bit of a fire under the metal as well as Treasury prices lifting each from near session lows. Treasuries were already on the recovery path from early weakness after a firm 30-year Bond auction relative to expectations capitulated the tape near-term. Overall, President Trump’s tweet and the ensuing news on Huawei is an ever-present reminder of the favorable geopolitical landscape and the necessary potential risk-premium heading into the weekend. PPI data was soft this morning and this is seen as weakening the Dollar and supportive to Gold.

Technicals: Yesterday’s pullback was as constructive as it gets, holding first key support at 1500. We had to begin Neutralizing our Bias in the near-term after Gold achieved major three-star resistance and our next upside target at 1523.9-1526.7. But given that prices are lower, and the broader trend is extremely strong, this reinvigorates our Bias although we remain somewhat cautious and advise that traders who have caught even just the most recent leg to this rally must lock in some profits or protect downside risks. The fact is, we want to be buyers at 1484.5-1487.2.

Bias: Bullish/Neutral

Resistance: 1523.9-1526.7***, 1588.2***

Pivot: 1513

Support: 1500**, 1494.5**, 1484.5-1487.2***, 1467-1469.2**, 1454.4-1458.2***

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