Gold continues its consolidation around the highly psychological $1000/oz level. A more protracted decline in gold was avoided this week after a sizable depreciation of the Dollar against both the Euro and the Pound over the last couple sessions. However, we maintain our negative trend outlooks on these major Dollar crosses for the time being, meaning a downward pressure in gold persists. We're witnessing a battle of the bulls and the bears across the marketplace, highlighted by gold's fluctuation around $1000/oz. While it seems the downtrend is gaining traction in major Dollar pairs, the bulls continue to keep the S&P's head above water amid mixed global economic data and a pickup in M&A activity. The strength in U.S. equities is the counterbalance against a strengthening Dollar, holding gold above 9/10 lows and our multiple uptrend lines. However, a significant deterioration in U.S. equities would likely exacerbate the Dollar's near-term broad-based appreciation and drop gold beneath key technicals. On the other hand, resilient U.S. equities could help turn the FX markets and allow gold to continue its march towards 2008 highs. We maintain our neutral outlook on gold trend-wise due since the precious metal is sitting at a crossroads. That being said, we believe there is ultimately a negative inclination in the gold since the technicals in the major Dollar crosses have deteriorated greatly. Meanwhile, 9/29 and 9/10 lows should serve as reliable technical cushions for gold along with our multiple uptrend lines. As for the topside, gold faces formidable resistances in our multiple downtrend lines and the highly psychological $1000/oz level.

Present Price: $996.60/oz

Resistances: $997.20/oz, $999.16/oz, $1001.13/oz, $1003.62/oz, $1006.12/oz, $1009.15/oz

Supports: $995.06/oz, $995.06/oz, $992.92/oz, $990.96/oz, $988.82/oz, $987.03/oz, $985.07/oz

Psychological: $1000/oz