Gold is in a stable landscape
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Yesterday’s close: Settled at 1507.9, up 18.9
Fundamentals: Gold has posted back to back gains of more than 1% in a steady recovery from what became panic selling partly due to an overcrowded long position. With equity markets under pressure, the dollar trickling lower and probability of a cut later this month mounting above 75%, it is foreseeably a very stable landscape for gold. Still, the metal will be very data dependent and the catalyst for the aforementioned market moves was Tuesday’s dismal ISM Manufacturing followed by August’s lower revision in ADP Payrolls. It is widely believed the Services sector is the last to go, a miss could really rev-up gold. Lastly, traders want to keep in mind that Nonfarm Payroll is tomorrow and that any momentum coming out of this week is likely to see a tailwind Monday from the conclusion of China’s Golden Week. Typically, selling has occurred coming into this holiday, as seen Friday and Monday, while steady buying has followed the end.
Technicals: Our technical narrative has not changed much from yesterday; the bulls are in the driver’s seat above 1495-1498. Yesterday’s settlement above 1503.7-1504 is good, but as our momentum indicator as caught up to here today, it is signaling the two-day recovery is getting technically exhausted without a fresh fundamental catalyst. Additionally, major three-star resistance at 1513-1515.6 was pinged. If data misses, look for Gold to advance further.
Resistance: 1513-1515.6***, 1527.5***
Support: 1495-1498**, 1484.5-1487.2***, 1450-1454**, 1413.2***