Gold is finally experiencing a sizable setback after nearly hitting the psychological $1200/oz level. News concerning the restructuring of debt in Dubai has sent a shockwave throughout equity and FX markets, resulting in large selloffs in global equities as well as bullish moves in the Dollar and Yen. In other words, we are witnessing a large risk aversion due to a spike in investor uncertainty, thereby knocking gold from the perch of its bubbly highs. Now that the Dubai news has sunk in, it will be interesting to see how far investors are willing to take the present flight from risk. That being said, investors may want to err on the cautious side considering how far crude fell after its bubble popped last year. Today's movement is certainly a sizable step back, yet a warranted one considering the bull run that has taken place since the eclipse of $1000/oz.

Meanwhile, gold has quite a few uptrend lines in place and the $1150/oz level could prove to be a technical cushion along with 11/17 lows. 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 level serve as technical barriers along with 11/23 and 11/26 highs. For the time being investors should monitor the EUR/USD's interaction with our uptrend lines along with the S&P's ability to mitigate intraday losses. We will certainly monitor the situation closely since today's volatility could carry over into next week.

Present Price: $1159.60/oz

Resistances: $1161.90/oz, $1167.02/oz, $1170.16/oz, $1173.02/oz, $1178.54/oz, $1182.37/oz

Supports: $1153.65/oz, $1150.09/oz, $1140.16/oz, $1137.60/oz, $1131.63/oz, $1127.36/oz

Psychological: $1175/oz, $1200/oz, $1050/oz

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