Gold is pulling back from intraday highs after trading at new record levels just above $1140/oz. Present weakness stems from a combination of profit taking and broad-based strength in the Dollar. However, despite today's slight pullback, there remains little reason to be technically negative on gold due to the lack of historical perspective to the topside. Investors would likely need to witness significant strength in the Dollar in order to make a noteworthy dent in gold. After all, gold has proven to be more closely correlated to the Dollar than U.S. equities. Therefore, investors should keep an eye on current weakness in the EUR/USD and AUD/USD and monitor whether any key supports are taken out in these currency pairs.

Meanwhile, U.S. economic data continues to print negatively mixed, including today's disappointing PPI data. The disappointing Core PPI number further supports the Fed's plan to maintain its loose monetary policy for the foreseeable future. The Fed's dovish attitude implies the continuation of a broad-based weakness in the Dollar. Therefore, gold's downside movements have been limited today, and the potential for further near-term gains remains.

Technically speaking, we're still unable to install a downtrend line on our chart due to a lack of historical perspective. Therefore, it's difficult to find any topside technical barriers besides gold's potentially psychological $1150/oz level. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 11.16 lows and the psychological $1100/oz level.

Present Price: $1131.95/oz

Resistances: $1134.71/oz, $1138.63/oz, $1143.16/oz

Supports: $1127.24/oz, $1124.42/oz, $1122.54/oz, $1117.87/oz, $1114.39/oz, $1111.49/oz

Psychological: $1100/oz., $1150/oz.

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