Gold futures finished the session a hair under 1250.0 an ounce Wednesday settling at 1249.7. Today’s settle puts the yellow metal up $19.70 for the week so far and the rally can be mostly attributed to safe haven buying in my opinion. S&P and Dow futures have suffered their worst weekly losses of 2017 this week, with technicians warning of a downside breakout for both indexes on the charts.
The reason for the recent weakness stems from increased investor sentiment of the President’s healthcare law failing passage in both the House and Senate. The failure to repeal and replace Obamacare would raise eyebrows on other expected pieces of legislation regarding corporate tax and other pro business initiatives that some investors have already priced in.
The continuation rally that started prior to the Fed meeting in gold continues to need to be fed by risk off sentiment in stocks, amid geo-political events and global economic uncertainties going forward. Given the uneasiness and unpredictability of the current administration in Washington, that without a return to previous all-time highs in equities, that any future dips in gold and silver going forward will be seen as buying opportunities.
Technically, support for April gold comes in for the remainder of the week at 1243.8 and with a close under, next support sits at 1220.3. Resistance is up at 1257.3, and then 1264.9. A close over here sets up 1288.0 as the next target to the upside.