Now is the time to take some profits in gold
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Last week’s close: Settled at 1552.4, up 24.3 on Friday and up 34.3 on the week
Fundamentals: Gold traded to 1590.9 last night, the highest levels since April 2013. The metal was already deep into a seasonally bullish time of year but fresh geopolitical tensions and mounting uncertainty in the Middle East has provided a massive tailwind. Traders should also not overlook Friday’s ISM Manufacturing read which contracted more than expected for the fifth month in a row. Although the headlines will focus on Iran, the economic calendar this week is jam packed. ISM Non-Manufacturing and Factory Orders are due tomorrow. Nonfarm Payroll is out Friday.
Technicals: We have been outright Bullish Gold since the December 23rd seasonal kicked in. Price action is trading out above major three-star resistance that aligns previous highs at 1566.2-1571.7. Above here, we have major three-star resistance we noted back in September at 1588.2-1595.7. This could provide a bit of a ceiling in the near-term technically. For this reason, we slightly Neutralized our Bias and suggest that longs who have ridden this wave capitalize in one way or another. Lastly, a failure to close above 1566.2-1571.7 could encourage a wave of profit taking.
Resistance: 1588.2-1595.7***, 1626**
Support: 1549.9***, 1537.3-1540**, 1525.4-1529***