Gold is dipping after a failed retest of previous 2009 highs. Gold continues to follow the EUR/USD and AUD/USD play by play, so investors should keep an eye on the movements of these currency pairs. Meanwhile, the EUR/USD, GBP/USD and USD/JPY are all trading around their respective psychological levels. In fact, it appears the only technical obstacle separating the EUR/USD from extended gains is its psychological 1.50 level. Additionally, the S&P futures are battling 1100 while crude stares down $80/bbl. Hence, the markets are at a critical juncture, and gold is no exception. The precious metal is presently parked between previous 2009 highs and its own psychological $1500/oz level, not to mention $1075/oz and $1100/oz hanging overhead. Hence, gold has its work cut out for it to the topside.

Gold's near-term movements will likely depend the ability of the Euro, Aussie, and Pound to break out further against the Dollar. The Dollar is presently focusing on BoE Governor King's upcoming public address along with the release of MPC Minutes and China's big wave of econ data. The main catalyst will likely be the GDP and Industrial Production numbers from China. If these data points outperform as we suspect, investors may be encouraged to send the broad-based market beyond its present psychological barriers. However, as we explained in our GBP/USD analysis, Governor King may find this an opportune time to psychologically weaken the Pound in light of its recent appreciation by reiterating his dovish monetary stance. In all, we are still positive on gold trend-wise since the technicals are working in favor of the topside more than downside. However, markets can turn quickly and we are at a critical point, so investors should closely monitor the upcoming performance of gold and its correlations.

Technically speaking, gold has topside barriers in the form of October highs along with the psychological $1075/oz and $1100/oz levels. As for the downside, the precious metal has multiple uptrend lines serving as technical cushions along with 10/16 lows and the psychological $1050/oz level.

Present Price: $1056.70/oz

Resistances: $1058.75/oz, $1061.40/oz, $1065.15/oz, $1068.06/oz, $1070.66/oz

Supports: $1055.46/oz, $1051.91/oz, $1048.62/oz, $1045.32/oz, $1042.96/oz

Psychological: $1050/oz, $1075/oz, $1100/oz

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