Gold continues to exert a relative strength and has popped past our 3rd tier downtrend line. Our 3rd tier downtrend line is key since it runs through February highs. Hence, a test and movement beyond the $1130/oz area could be in the works. Gold is moving higher once again without the Euro and Pound, which are both mired in fiscal and political uncertainties. Therefore, it appears gold may become a safe haven in its own right and ignore its negative correlation with the Greenback. However, we'll have to continue to monitor the situation to determine whether this becomes a more lasting deviation. Meanwhile, all is quiet on the data front today with a busy day on deck. The UK will release HPI and Services PMI data tomorrow followed by U.S. Services PMI and ADP Non-Farm Employment Change figures. Australia will kick off the day by printing its GDP during the Asia trading session. Hence, volatility could reignite tomorrow considering all of these data points carry some weight.
Technically speaking, we left our trend lines as is today to give investors a clear picture of gold's breakout. That being said, Gold has no foreseeable downtrend lines from present price and faces technical barriers in the form of 2/22 and 1/20 highs. As for the downside, gold has multiple potential uptrend lines serving as technical cushions along with 3/1 and 2/23 lows. Additionally, the highly psychological $1100/oz level could serve as a strong technical cushion should it be tested.
Present Price: $1125.85/oz
Resistances: $1125.97/oz, $1128.16/oz, $1130.84/oz, $1134.13/ oz, $1135.82/oz, $1138.73/oz
Supports: $1123.30/oz, $1120.80/oz, $1119.11/oz, $1116.20/oz, $1114.26/oz, $1111.60/oz
Psychological: $1100/oz, $1125/oz, $1150/oz, February highs