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Gold’s rally is healthy but it needs more

Commentaries & Views

Yesterday’s close: Settled at 1540.2, up 8.7

Fundamentals: Gold surged higher yesterday as House Speaker Nancy Pelosi opened an impeachment “inquiry” on President Trump and Trump himself spoke critically on China and Iran. This remains a very supportive environment for Gold as Treasury yields dip lower and the 2-10 spread continues to flatten to just three basis points. Chicago Fed President Evans spoke this morning and called the economy “quite solid” and noted unemployment is still low. Evans is a 2019 Fed voter. Yesterday, Consumer Confidence dipped back down which helped support Gold’s most recent leg higher.

Technicals: We remain Bullish in bias, but gold will not turn outright Bullish despite the close above major three-star resistance at 1529.1-1531.9. Still, we find the bulls handedly in the driver’s seat above that previous resistance level. The rally, though very healthy, could be running a bit out of steam in the near term as it has battled over the last three sessions to achieve this. Key resistance at 1546-1548.7 has kept a lid on the extension thus far.

Bias: Bullish/Neutral
Resistance: 1537.9*, 1546-1548.7**, 1565**, 1588.2***
Pivot: 1529.1-1531.9
Support: 1515.1-1517.7***, 1507.4**, 1498.6-1500***, 1484.5-1487.2****

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