Technical Levels Remain Trader's Focus Points
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(Kitco News) - Gold has been trading to pattern over the past few days, mirroring the moves in the $U.S. Friday's pushlower was the result of the Trump administration's announcement of steel andaluminum tariffs, which sparked fears of a trade war and sent the dollar higherprimarily in anticipation that tariffs would result in higher inflation ( amore aggressive Fed) and our trading partners, especially China, may back away from supporting our Treasury auctions, which again would requirehigher yields to encourage buyers into U.S. paper. The key to trading thesemarkets has been technical levels. When gold bounced back over $1,307 on Friday, technical traders re-entered the long side afterthe euro re-established above the 1.22 euro/dollar pivot point. Theacceleration of the dollar decline since Monday morning, with speculation thatthe tariffs may be watered down or exemptions granted to certain counties, has taken the edge off the recent concerns. Butthe final verdict remains in question, whichwill continue to create volatility. Would expect gold to have some resistanceat the $1,337 level, but a break through here suggests a test of the $1,355level. Watch the $1,327 level for initial support and then again at $1,322.
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