Gold is presently consolidating around our 2nd tier uptrend line after experiencing a solid down-bar backed by a pop in volume on Monday. Gold's recent weakness came in reaction to a stronger Dollar, particularly against the EUR/USD. We notice the AUD/USD is drifting lower as well, and this is a negative sign for gold considering it has exhibited a stronger positive correlation with these two major crosses. Meanwhile, the S&P futures have dropped below our important 1st tier uptrend line and are presently testing their psychological 1050 level after New Home Sales printed negatively. The S&P's decline beneath our 1st tier could indicate a retracement towards previous October lows and the psychological 1000 area. Any extended weakness in U.S. equities of this sort would likely yield a stronger Dollar due their positive correlation, and consequently weaker gold. All eyes will be on tomorrow U.S. Advance GDP data. Therefore, investors should keep a close eye in the S&P's interaction with our aforementioned technicals and their reaction to econ data.

Technically speaking, gold has our 1st tier uptrend line and 10/6 lows to fall back on along with the highly psychological $1000/oz area should the markets take a turn for the worst. As for the topside, gold is creating some new topside barriers as the precious metal heads south, beginning with 10/6 and 10/7 highs as well as the psychological $1050/oz level.

Present Price: $1036.05/oz

Resistances: $1043.60/oz, $1046.91/oz, $1049.98/oz, $1053.76/oz, $1058.26/oz

Supports: $1036.03/oz, $1032.01/oz, $1029.41/oz, $1024.44/oz, $1018.53/oz

Psychological: $1050/oz, $1000/oz.