Gold made a surprise retest of $1100/oz, temporarily peaking over the highly psychological level before retreating back towards $1090/oz. What made gold's slight pop surprising is the fact that it came in reaction to much weaker than expected U.S. unemployment data. While one would expect a flight towards the Dollar and consequently a pullback in gold due to their negative correlation, the risk trades are holding strong thus far considering the circumstances. It seems investors were initially encouraged to pick up some gold after the unemployment rate headed past 10% (10.2%) in an effort to diversify their portfolios. However, it's hard to expect the risk trade to hold up all afternoon in light of what has transpired. Therefore, gold may be hard pressed to accelerate past $1100/oz today unless we experience a sizable devaluation of the Dollar. Therefore, we will wait to see how the day transpires before providing a more in depth analysis.
Fortunately for bulls, we're still at a loss of downtrend lines and historical perspective for gold. Therefore, the psychological $1100/oz level serves as our only trustworthy topside technical for the time being. Today's direct about face from $1100/oz further supports the assumption that $1100/oz could serve as a reliable topside barrier for the near-term. As for the downside, we've readjusted our uptrend lines, giving us an idea of support. Gold has 11/05 and 11/04 lows serving as technical cushions along with our new 3rd tier uptrend line and the psychological $1075/oz level.
Present Price: $1092.55/oz
Resistances: $1095.12/oz, $1098.11/oz, $1100.97/oz
Supports: $1089.07/oz, $1086.43/oz, $1083.14/oz, $1079.93/oz, $1075.01/oz
Psychological: $1100/oz, $1075/oz.