Gold vulnerable to waves of selling
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Yesterday’s close: Settled at 1512.8, up 8.9
Fundamentals: As risk assets fell sharply on the reopen last night, Gold found itself hitting the highest level in a week. Unfortunately, for Gold bulls the same reversion has happen as there is now a bit more optimism on U.S and China trade talks. Yes, we must truly question this newfound sentiment, however, each side seems a bit more desperate than in the past. Still, we see any interim deal as a sell the news for risk assets and thus a potential buying opportunity for safe-havens. Today’s CPI data came in overall a tenth softer than expected across the board except for YoY Core which was as expected. Despite the results, Gold has been moving lower, one must consider that after three stronger than expected and firm months in a row, one soft number is not changing anyone perceived trajectory enough to impact Gold or the Dollar against crucial technical levels. The good news for the metal is that the odds of a Fed cut later this month have mounted to 85%. The question in the near-term for this rangebound market remains U.S and China trade headlines.
Technicals: While we remain Bullish in Bias given the strong longer-term uptrend, it must be understood that Gold is again failing to hold out above major three-star resistance at 1513-1515.6 after failing to settle above there yesterday. Price action is susceptible to waves of selling down to 1501-1503.9 and it must hold here through today in order to reinvigorate potential buying into the weekend.
Resistance: 1513-1515.6***, 1527.5***
Support: 1501-1503.9, 1495.4**, 1484.5-1488.2***, 1450-1454**, 1413.2***
Support: 1515.1**, 1498.6-1500***, 1484.5-1487.2****