Gold damaged but still standing
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Featuring views and opinions written by market professionals, not staff journalists.
Last week’s close: Settled at 1560.3, up 9.8 on Friday up 0.2 on the week
Fundamentals: Gold is defying logic this morning and trading more than 1% from last night’s spike high. Price action began making a U-turn at midnight despite mounting fears that the respiratory epidemic in China coined the Coronavirus could spread. The Dollar is weaker against most major currencies and equity markets are broadly lower across the globe. However, the Chinese Yuan is down 0.54% against the Dollar and German ZEW Sentiment came in much better than expected. Still, the German 10-year Bund yield although up marginally on the session is still below las week’s lows and U.S Treasuries prices are sharply better on Coronavirus fears. Lastly, the onset of Chinese Lunar New Year is typically a supportive time for Gold. Overall, the only answer we have at this point is Gold technically failed at resistance.
Technicals: Gold ran into a strong area of major three-star resistance last night at 1565.8-1571.7. This is an area that we have said the metal must close above in order to reinvigorate immediate-term bullishness. Platinum and Silver which both surged yesterday are about 3% from those highs. Our Pivot today is the initial 1551.8 low in Gold, it must regain this level in order to work to neutralize this early damage. Support does come in at 1546.5-1547.6 and the metal must respond.
Resistance: 1558.4-1560**, 1565.8-1571.7***, 1583.9*, 1588.2-1595.7***, 1613.3**, 1626**
Support: 1546.5-1547.6**, 1538.3-1541**, 1529.8-1533.2***, 1510-1514.3***