Gold prices are struggling

New York (Oct 15)  Fundamentals: Gold and Treasuries are peeling sharply off their overnight highs as equity markets lift on upbeat earnings and NY Empire State Manufacturing beat expectations. The tape is ignoring IMF growth downgrades, but these revisions were to be expected. Standing out the most though was China’s 2020 GDP being revised from 6.0% to 5.8%. Overall, no negative news on U.S-China trade is good news, and this has reinvigorated positive sentiment broadly. Kansas City Fed President George speaks at 11:45 am CT today and here comments will be closely watched as she dissented in September. The odds of a cut later this month currently sit at 72%.

Technicals: Gold just could not do it; it could not hold above first key resistance at 1500.9 and this has led to technical weakness. Price action is now below the 1495.4 battleground and our momentum indicator at 1496.9. What matters most once again is major three-star support at 1484.5-1488.2, a level in which it has not settled below on this swing. We remain longer-term bullish but near-term cautious.

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