Gold has strengthened well from Friday's selloff, popping back above the psychological $1175/oz level as the EUR/USD and AUD/USD move higher. Investors seeming to be brushing aside the Dubai debt issue, and are reacting by challenging 1100 again in the S&P. Gold is finding comfort in the preference for risk amid an increase in global uncertainty. That being said, there are quite a few key data releases coming from China, the UK, and the U.S. over the next 24 hours which could move the markets. Therefore, gold may be looking to the upcoming fundamental releases before deciding whether to tackle $1200/oz, or submit to recent downside pressure resulting from risk-aversion and profit-taking. Regardless, gold's impressive uptrend is alive and well with multiple positive technical forces working in its favor.
Gold has quite a few uptrend lines in place and the $1150/oz level could prove to be a technical cushion along with 11/27 and 11/17 lows should they be tested. As for the topside, we're unable to place a downtrend line until we have a bit more track record to use. Therefore, the $1175 and $1200/oz levels serve as technical barriers along with 11/26 highs. For the time being, investors should monitor the EUR/USD's interaction with our trend lines along with the S&P's ability to climb back above 1100. A breakout in either could help boost gold due to correlative forces.
Present Price: $1176.70/oz
Resistances: $1178.54/oz, $1182.37/oz, $1186.5/oz, $1194.82/oz
Supports: $1173.02/oz, $1170.16/oz, $1165.57/oz, $1161.90/oz, $1156.88/oz, $1149.37/oz
Psychological: $1175/oz, $1200/oz, $1150/oz