Gold is paring earlier losses, bouncing off of 9/29 lows and our 2nd tier uptrend line. Gold continues to hold strong above a key set of September lows despite the selloffs in the EUR/USD, GBP/USD, and USD/JPY. Furthermore, the S&P futures are finally experiencing the pullback analysts anticipated. The EUR/USD and GBP/USD are also trading above intraday lows, showing gold is tracking the Dollar more closely than equities as has been the norm throughout the economic downturn. Speaking of which, investors should recall that the EUR/USD has been the best correlation to track as far as gold is concerned. Coincidentally, we notice solid uptrend lines in both gold and the EUR/USD, whereas the Cable and USD/JPY have few near-term technical cushions. Therefore, gold should continue to be resilient should the market-wide pullback pick up momentum. However, there could come a breaking point in gold over time should its patience be tested. For the time being, gold has September 29th lows and our 1st and 2nd tier uptrend lines serving as technical cushions. Our 2nd tier uptrend line appears to carry more weight than our 1st tier. A failure of our 2nd tier could imply a rather quick pullback towards $975/oz. As for the topside, gold faces multiple downtrend lines, 9/30 highs, and of course the highly psychological $1000/oz level. While it's wise to maintain a neutral outlook on gold trend-wise for the time being, the downtrend has a stronger case over the near-term considering the negative performance of the precious metals correlations.
Present Price: $995.45/oz
Resistances: $997.20/oz, $999.16/oz, $1001.13/oz, $1003.62/oz, $1006.12/oz, $1009.15/oz
Supports: $995.06/oz,$992.92/oz, $990.96/oz, $988.82/oz, $986.96/oz, $984.99/oz