Although price hesitation has set in, we continue to hold our positive upside outlook on Gold in the short term. This leaves the risk of a return above the 1,802.75 level, its Nov 08'2011 high on the cards with a violation of there allowing for further strength towards the 1,827.85 level, its Sept 19'2011 high. Further out, resistance comes in at the 1,862 level, its Sept 12'2011 high. Alternatively, on any pullbacks, the 1,693.95 level should come in as support. We expect a reversal of roles as support to occur at this level and then turn the pair higher again. However, a break of the 1,693.95 level could see the commodity weakening further towards the 1,595.75 level and then the 1,532.90 level, its Sept'2011 low. All in all, Gold remains biased to the upside in the short term with eyes on the 1,802/27 levels.

/