With a lower level rejection candle printed on Tuesday and a follow-through higher seen today, the risk of returning above the 1,693.95 level, its Oct 17'2011 high is building up. If this occurs, the 1,786.70 level, its Sept 22'2011 high will be targeted. Above this level will open the door for a move higher towards the 1,800 level, its psycho level. Its daily RSI is bullish and pointing higher supporting this view. Alternatively, on any pullbacks, the 1,693.95 level just violated will come in as the initial support. We expect a reversal of roles as support to occur at this level and then turn the pair higher again. However, a breach 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 maintains a nearer term upside risk having taken out the 1,693.95 level.
Commodity