Gold is defying gravity and continues its incredible run despite fluctuations in the EUR/USD and AUD/USD. Gold continues to have a mind of its own and is rising rapidly regardless of comparatively limited participation from the precious metal's usual correlative forces. Hence, there are clearly alternative forces driving gold higher. Ultimately, it seems that the Fed's dovish monetary policy combined with mounting U.S. debt is causing investors and central banks to diversify from the Dollar and pile into gold as the safest alternative. As a result, gold continues to charge higher despite some analyst warnings of a bubble. Overall, it will be interesting to see whether gold can continue its ascent towards the psychological $1200/oz level, and whether the precious metal's usual positive correlation with the Dollar eventually kicks into place. If so, this would likely imply a large selloff in the Dollar. Meanwhile, volatility in the FX markets could pick up tomorrow with the release of U.S. Prelim GDP along with a host econ data and news from Britain and the EU. Investors should keep an eye on the EUR/USD. If the EUR/USD should find the strength to break through 1.50 and previous November highs, this could help fuel gold's run towards $1200/oz.
Technically speaking, we're unable to place any notable topside barriers or downtrend lines on our chart due to the lack of historical perspective. Therefore, the psychological $1175/oz and $1200/oz levels appear to be the only topside technicals at work for the time being. As for the downside, we continue to move our multiple uptrend lines higher while 11/20 lows and the psychological $1150/oz level serve as technical cushions.
Present Price: $1169.80/oz
Resistances: $1170.16/oz, $1173.02/oz
Supports: $1163.85/oz, $1160.69/oz, $1152.65/oz, $1150.09/oz, $1139.50/oz, $1132.01/oz
Psychological: $1175/oz, $1200/oz, $1050/oz