Gold is continuing its consolidation around the psychological $1100/oz level as the Dollar wavers ahead of U.S. New Home Sales and the Fed's monetary policy decision. The chaotic appearance of our chart implies that gold could be approaching a turning point. All of our trend lines are colliding while the EUR/USD and AUD/USD trade around key supports. That being said, investors should monitor the major Dollar crosses for any considerable technical setbacks for this could forewarn of a similar decline in gold. On the other hand, should the major Dollar pairs be able to stabilize and the Dollar weaken, this could help gold make up for some of January's lost ground. In addition to today's data and Fed decision, Obama will also deliver his State of the Union tonight followed by U.S. Durable Goods Orders tomorrow. Hence, volatility could pick up over the next 24-48 hours.
Technically speaking, gold has multiple uptrend lines serving as technical cushions along December '09 lows should they be tested. As for the topside, gold faces a few steep downtrend lines along with the highly psychological $1100/oz level. Furthermore, intraday and 12/31 highs could serve as technical barriers should they be reached.
Present Price: $1093.25/oz
Resistances: $1096.91/oz, $1100.67/oz, $1103.49/oz, $1106.31/oz, $1110.07/oz, $1115.39/oz
Supports: $1088.45/oz, $1085.01/oz, $1082.10/oz, $1079.30/oz, $1074.95/oz, $1070.65/oz
Psychological: $1075/oz, $1100/oz, December lows