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Tame inflation supporting gold prices

Commentaries & Views

Yesterday’s close: Settled at 1550.6, down 9.5

Fundamentals: Gold slipped sharply overnight just ahead of the strong Chinese Trade Balance data and as the U.S Dollar continues to strengthen. Still, the Treasury complex is stable and U.S CPI data was in-line with expectations to slightly soft. This is keeping the metal from accumulating further losses while equity markets trek again to fresh record levels. Despite reasons, we noted here early last week that Gold comes out of the Dec.23 seasonal buy and typically pares a portion of those gains in the fourth or fifth trading day of the year. This move should not come as a surprise due to such and as the geopolitical risk premium dissipates. NY Fed President Williams speaks at 8:00 am CT

Technicals: We have been noting here that we are keeping a minor Bullish Bias due to our longer-term outlook and the intermediate to longer-term trend. However, we have advised here and through recent TV interviews that we are prepared to see Gold trade as low as the $1500 mark. Strong major three-star support comes in at two levels: 1529.8-1533.2 and 1510-1514.3. The metal nearly tagged the first level last night and we believe there is value as it moves down, what matters most is your risk tolerance; there are many ways to strategize and we are here to help – 312-278-0500.

Bias: Neutral/Bullish

Resistance: 1555.2-1558.4**, 1566.2-1571.7***,1588.2-1595.7***, 1613.3**, 1626**

Support: 1538.3-1541**, 1529.8-1533.2***, 1510-1514.3***

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