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Gold is holding $1,500 as rate cut expectations fall

Commentaries & Views

Yesterday’s close: Settled at 1511.5, up 12.0

Fundamentals: Considering that the odds of a Fed cut tomorrow are dissipating to only a 65% probability, Gold is holding very well. Geopolitical uncertainties have arguably stabilized Gold above the psychological $1500 mark, encouraging a constructive landscape from both a fundamental and technical perspective. Today’s Industrial Production data handedly beat expectations, and this was the latest data point that may encourage the Fed to be more patient tomorrow.

News the NY Fed announced a repo operation of up to $75 billion has likely nerved investors encouraging stability in Gold. The metal held well through the Bond move late last week and this gives buyers another reason to defend the $1500 mark.

Technicals: Despite waves of weakness, Gold never settled below major three-star support at 1489.6-1500 and this is certainly constructive. However, we must also see strength in holding rallies; something the metal struggled to do last night. Gold failed to hold 1520.4 yesterday and has struggled at 1510.7-1511.1 through today; a close above here is needed to stave off waves of selling.

Bias: Neutral/Bullish

Resistance: 1520.4**, 1529.1-1531.9***, 1537.9*, 1546-1548.7**, 1565**, 1588.2***

Pivot: 1510.7-1511.1

Support: 1498.6-1500***, 1484.5-1487.2***

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