Gold's incredible uptrend appears alive and well after the precious metal popped passed $1200/oz with relative ease. Gold continues to knock down barriers as investors and governments look to divest from the Dollar. Yesterday's positive manufacturing data from China combined with the RBA's 25 basis point increase was enough to signal that the rally of emerging economies is continuing. Hence, investors were confident enough to send gold past $1200/oz while delivering another round of Dollar weakness in succession with a rally in emerging equities. Meanwhile, investors are eagerly awaiting tomorrow's ECB monetary policy meeting along with key econ releases from the U.S. and UK. Therefore, investors should keep an eye on activity in the Dollar over the next 24-48 hours. Should U.S. and UK data print positively and the ECB deliver a more hawkish monetary policy stance we may witness another wave of Dollar weakness, thereby sending gold higher due to its negative correlation with the Greenback. On the other hand, a retracement towards $1200/oz wouldn't be surprising since we witnessed similar at $1100/oz and $1000/oz.
Technically speaking, gold has multiple uptrend lines serving as technical cushions in addition to 11/30 and 11/24 lows. Furthermore, the psychological $1200/oz and $1175/oz levels serve as supports should they be tested. As for the topside, we're still unable to initiate a reliable downtrend line due to the lack of historical data. Therefore, the psychological $1200/oz level and intraday highs serve as the only technical barriers for the time being.
Present Price: $1210.05/oz
Resistances: $1214.05/oz, $1216.37/oz
Supports: $1206.24/oz, $1202.74/oz, $1198.87/oz, $1194.17/oz, $1189.65/oz, $1183.65/oz
Psychological: $1200/oz, $1175/oz, 2009 Highs