Should gold bulls lock in profits?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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.
Resistance: 1549.9***, 1554*, 1566.2-1571.7***
Support: 1537.3-1540**, 1525.4-1529***