6-20-2017 Two weeks ago, gold failed to break above the $1,300 handle for the second time this year. It drifted lower and investors cut long positions as the FOMC approached last week. The FOMC raised the fed funds target rate to 1.00% – 1.25% and the commentary suggested that interest rates will normalize faster than financial markets expected. Gold traded lower in the wake of the FOMC and has trended down for the last four consecutive trading days. Support is coming in at the 200 day moving average of $1,238.50 and a seven point trendline at $1,240 dating back to September of last year. The SPDR gold ETF shed 400,000 toz last week, the largest redemption of a given week all year, and CFTC positioning showed a reduction of Comex gold length of 1.275 million ounces. With the hangover of the FOMC still fresh, stocks at all-time highs (again), and the USD trending higher, gold may find it difficult to mount a rally. Silver is trading well below its major moving averages and $16 is the next level to watch.
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