Gold Rally Looking A Little Exhausted
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Yesterday’s close: Settled at 1531.2, up 3.4
Fundamentals: Gold has battled extremely well given a strong wave of U.S data early yesterday morning and broadly better risk-sentiment today. The Dollar Index has gained nearly 1% this week but this is being offset by a new record low yield in the 30-year Bond as it traded below 2% for the first time. A softer 30-year Bond price today is not favorable though. Gold is trading off its overnight high as it is showing some minor signs of exhaustion and that is ok after such a magnificent run. Stronger data coupled with a good finish to the week in equities will likely weigh on Gold and what matter most from there is whether the metal holds a constructive technical landscape.
Technicals: Gold closed above major three-star resistance yesterday and this is great to see, however, the failure to see follow through and a trade below the 1546.1 swing high could be early signs of exhaustion. We advise locking in some gains or protecting downside heading into next week. Our momentum indicator is now an eyelash above this resistance level and with price action below here, it is showing a technical sign of exhaustion. As we said yesterday, Gold can go lower without breaking its construction; we are Bullish in Bias above major three-star support at 1484.5-1487.2, however, as we said above, traders should be locking in gains or protecting downside.
Resistance: 1523.9-1527.9***, 1546.1*, 1588.2***
Support: 1516.7**, 1498.6-1500**, 1484.5-1487.2***