Weak Economic Data Supporting Gold Market
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Yesterday’s close: Settled at 1555.9, up 26.5
Fundamentals: After an extremely constructive technical path through the long weekend, Gold found a massive tailwind with the worst ISM Manufacturing data since February 2016. This surged the metal to an overnight high of 1559.2 before positive news out of Hong Kong poured cold water over global fears. Ultimately, not much has changed out there, but stocks are trying to tell a different story. Fed speak becomes ever important today after yesterday voting member St. Louis Fed President Bullard called for a 50-basis point cut at the meeting in two weeks. NY Fed President Williams talks at 8:30 am CT, San Francisco Fed President Bowman and Bullard both speak at 11:30 am CT. Minneapolis Fed President Kashkari is due at noon and Chicago Fed President Evans is at 2:15. Remember, Williams, Bullard and Evans are the voters in two weeks.
Technicals: Price action has held first support coming back from yesterday’s high at 1542.4-1546.4. Although major three-star support comes in at 1530-1531.2, Gold remains extremely immediate-term constructive holding this first key support as it did this morning. Still, the August 26th 1565 high acts as a headwind.
Resistance: 1565**, 1588.2***
Support: 1542.4-1546.4**, 1530-1531.2***, 1525**, 1516.7-1518.8**, 1498.6-1500**, 1484.5-1487.2***