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Should gold bulls lock in profits?

Commentaries & Views

Yesterday’s close: Settled at 1528.1, up 5.0

Fundamentals: Gold is up 1.5%, trading to the highest level since September 5th after the U.S launched an attack that killed Qassim Suleimani, Iran’s top security and intelligence commander (see additional details in the S&P section). The S&P has pared losses and sits down about 1% while Treasuries and safe-haven assets (Gold) surge along with Crude Oil. The Dollar Index remains about 0.75% off its December 31st low and traders should keep an eye on its strength (or weakness) given that ISM Manufacturing data came in weaker than expected. Traders should also keep a pulse on developments as to Iran’s retaliation; failing to see one (a good thing for this world) by the Sunday night open could take some near-term wind out of Gold’s sails unless equity markets see continued weakness or Manufacturing data whiffs. Gold has had a tremendous rally since the start of what we called a buy on December 23rd, if you have profited on such a move, you should look to capitalize between now and Sunday night as Gold historical takes a breather somewhere between the third and fifth trading day of the year.

Technicals: Gold is flirting out above major three-star resistance at 1549.9 and holding strongly out above our momentum indicator which comes in today at 1537.3 and aligns with 1540 to create first key support and a tradable test. Only a decisive move below 1537.3 which is rising or a close below 1525.4-1529 will neutralize the metal’s strength. As stated above, longs should consider locking in profits on this run, contract our trade desk for help at 312-278-0500.

Bias: Bullish
Resistance: 1549.9***, 1554*, 1566.2-1571.7***
Support: 1537.3-1540**, 1525.4-1529*** 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.