Following its strong rally the past week, Gold gapped through its last week high at 1,681.35 in early trading today and has set the stage for further strength. This development has opened the door for further upside gains towards the 1,700 level, its psycho level where a violation will push the commodity further higher towards the 1,750 level and subsequently the 1,800 level. Its daily is bullish and pointing higher suggesting further strength. Alternatively, on any pullback, Gold will aim at the 1,681.35 level, its Aug 04'2011 high. A reversal of roles as support is expected to turn the commodity higher at that level but if that fails to occur and a break below that level happens, further downside weakness will target the 1,632.60 level, its July 29'2011 high and then the 1,600.00 level.
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