GOLD: Price Hesitation Sets In, Vulnerable

While the medium term outlook for Gold points to the upside, it now faces price hesitation following its turn ahead of the 1,762.50 level. An eventual violation of there is required to end its pullbacks and call for a move higher towards the 1,802.75 level, its Nov'2011 high. Its daily RSI is bullish and pointing higher supporting this view. The alternative scenario will be a return to the 1,709.79 level. This will pave the way for run at the 1,641.35 level. Below here will set the stage for further declines towards the 1,522.55 level, its Dec 2011 low with a break opening the door for additional weakness towards its psycho level at 1,500.00. All in all, Gold continues to hold on to its nearer term strength.