Gold Exits Year 2009 with Incline

Gold prices climbed as a result of anticipations that the dollar will plummet next year therefore increasing demand on gold as an alternative investment which therefore supports gold prices, leaving them inclining on the last day of 2009.

Yesterday, gold shed $3.80 or 0.35% to close at $1092.68 an ounce as the U.S. dollar was on the rise yesterday therefore we saw the Dollar Index, a measure of the dollar against a basket of six currencies climb and this weighed on precious metal prices, the Index is currently traded at 77.52 while recording a high of 77.93 and a low of 77.40.

Investors wait for next year as there are expectations that inflation will climb as a result of the current stimulus plans applied by major governments of the world, as they are injecting billions in markets which on the long run might trigger inflation. Precious metal is known as a hedge against inflation which is why we speculate gold prices to rise next year.

Turning to Asian stock markets, we see they are rising as the MSCI Asia Pacific Index posted the most incline since 2003 as a result of higher commodity prices while China said it was going to keep the stimulus programs active as a way to help end the global recession.

Among other precious metals; platinum is traded at $1461.90; palladium at $399.50; silver at $16.99; while, copper is at $336.15. Turning to commodity futures we see yesterday, S&P GSCI closed at 525.04 points recording a high of 528.47 points and a low of 523.08 points while RJ/CRB Commodity closed at 283.63 points recording a high of 285.17 points and a low of 283.18. The precious metal was set in London on Wednesday at $1087.50 per ounce declining from $1092.50 per ounce during the AM fixing.

Other commodities, oil prices are rising at this morning the markets opened at $79.28 per barrel; crude prices continue to climb for the seventh consecutive day as a result of the current weather conditions which means that demand on heating fuel in the U.S. economy grows led from cold weather.

Currently, spot gold is traded at $1104.45 an ounce recording a high of $1104.82 an ounce and a low of $1092.40 an ounce.

Gold Sinks Towards December Lows on Dollar Strength

Gold has sunk back below its highly psychological $1100/oz level again, and is dipping towards previous December lows as the Dollar experiences another broad-based rally. Investors are favoring the Greenback once again due to a holiday-shortened week and a sparse data wire. Investors seem to be favoring the more dominant momentum during the month of December, or a stronger Dollar and weaker gold. Investors did receive Chicago PMI data today, which printed stronger than analyst expectations. More positive economic data only strengthens investor confidence in America’s economic recovery, a positive catalyst for the Dollar and negative for gold. Meanwhile, the data wire will continue to quiet down with Britain’s Nationwide HPI and America’s weekly Unemployment Claims being the only credible releases during tomorrow’s trading session. Hence, gold and the Dollar may continue to favor their present momentums.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 12/18 and 12/23 lows. Our 3rd tier uptrend line could prove to be an important trend line since it runs through 10/28 lows, or the $1025/oz level. As for the topside, gold faces technical barriers in the form of 12/28, 12/21, and 12/15 highs along with the psychological $1075/oz and $1050/oz levels.

Present Price: $1087.29/oz

Resistances: $1088.29/oz, $1094.14/oz, $1098.77/oz, $1102.95/oz, $1107.84/oz, $1111.33/oz

Supports: $1082.58/oz, $1079.61/oz, $1074.42/oz, $1070.24/oz, $1060.93/oz

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

Gold Consolidates Above $1100/oz

Gold has popped back above the highly psychological $1100/oz level, which could turn out to be a hard fought battle since the area does carry some extra psychological weight. Gold is finding its strength in Dollar weakness as we witness pops and consolidation in the EUR/USD and AUD/USD. However, weakness in the Cable and strength in the USD/JPY is likely tempering gains in gold along with the gravitation force of $1100/oz. Meanwhile, activity should remain at a subdued level since we’re in another holiday-shortened week. The U.S. will release some key economic data this week, beginning with today’s CB Consumer Confidence and S&P HPI figures. More mixed U.S. data could yield additional Dollar weakness as investors lock-in recent Greenback gains, a positive catalyst for gold due to their negative correlation. That being said, markets could move a bit should upcoming data surprise in either direction.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 12/18 and 12/23 lows. As for the topside, gold faces technical barriers in the form of 12/21,12/15, and 12/7 highs along with the psychological $1150/oz level.

Present Price: $1106.20/oz

Resistances: $1110.77/oz, $1115.27/oz, $1118.69/oz, $1123.03/oz, $1128.35/oz, $1134.16/oz

Supports: $1104.51/oz, $1100.58/oz, $1094.14/oz, $1088.30/oz, $1082.58/oz, $1079.61/oz

Psychological: $1100/oz, $1150/oz, $1075/oz

Gold Prices Begin Week Extending Incline

The precious metal extended its rise at the start of the week on anticipations that some investors are buying more metal since it fell the most since April also as the dollar continued to decline in the markets versus a basket of major currencies, therefore supported demand on gold and other metals as a alternative investment.

Thursday since the markets were closed on Friday as a result of the Christmas Holiday, gold rose $18.10 or 1.66% to close at $1104.60 an ounce as the dollar lost momentum against six major currencies which are measured by the Dollar Index, which slipped today to 77.69 while recording a high of 77.85 and a low of 77.65.

The dollar in the markets fell at the closing of last week as a result of investors closing in on positions which was led from holidays, currently the currencies markets is affected by holidays rather than economic data.

As for platinum it spiked to a three-week as a result of higher auto sales demand on the metal that is applied in pollution control devices. Currently platinum is being traded at $1476.40 while so far recording a high of $1480.40 and a low of $1469.40. Palladium is being traded at $380.00 recording a high of $384.50 and a low of $379.00 while Copper is currently at $331.10 recording a high of $332.00 and a low of $330.23.

SPDR gold trust, the largest exchange-traded fund backed by bullion in the world, remained at 1,132.70 metric tons for the third day.

In addition, stocks in Asia jumped as a result of South Korean engineer companies receiving nuclear orders worth $20 billion next to Japan stating that its industrial production climbed while China lifted its economic growth readings.

Turning to oil, we see that prices climbed as the EIA report was released last week showing that oil inventories in the U.S. economy, which is the biggest oil consumer in the world, fell therefore hinting that demand is improving which is boosting oil prices.

Currently, spot gold is traded at $1113.11 an ounce recording a high of $1104.94 an ounce and a low of $1104.55 an ounce.

Gold Drops with Broad-Based Dollar Strength

Gold is dropping beneath our 4th tier uptrend line right now, which is not shocking considering the broad-based Dollar rally taking place. Investors are snapping up the Dollar in reaction to a more hawkish monetary policy statement from the Fed. The central bank implied that it may be comfortable with allowing some of its alternative liquidity measures expire next year should economic fundamentals continue to improve. Both the EUR/USD and GBP/USD have been knocked beneath key uptrend lines while the AUD/USD drifts below its psychological .90 level. Hence, gold is exercising its negative correlation with the Greenback, sinking back toward previous September lows and the highly psychological $1100/oz level. That being said, gold’s intraday losses thus far aren’t as extreme as the downward movements in the EUR/USD. Hence, investors should continue to eye major Dollar pairs to determine whether we’re witnessing a temporary top in the Greenback considering the extent of today’s rise. If so, gold may opt to stab above its $1100/oz level. On the other hand, gold’s less severe reaction to the Fed’s decision may only mean that more extensive losses may be in the works over the near-term.

Technically speaking, gold still has multiple uptrend lines serving as technical cushions along with 12/11, 12/9, 11/13, and 11/10 lows. Furthermore, the psychological $1100/oz level could serve as a reliable technical support should it be tested. As for the topside, gold faces topside technical barriers in the form of 12/11,12/9, and 12/7 highs along with the psychological $1150/oz and $1175/oz levels.

Present Price: $1112.60oz

Resistances: $1115.27/oz, $1123.03/oz, $1128.34/oz, $1134.47/oz, $1141.42/oz, $1147.54/oz

Supports: $1110.77/oz, $1105.05/oz, $1100.15/oz, $1096.47/oz, $1088.30/oz, $1082.58/oz

Psychological: $1100/oz, $1150/oz, $1175/oz

Gold Trades Slightly Positive with Fed Decision Approaching

Gold has continued to avoid a retest of the psychological $1100/oz level, finding support above 12/11 lows and our 4th tier uptrend line. The precious metal is experiencing a bit of intraday strength after U.S. economic data printed in line with analyst estimates. The EUR/USD and AUD/USD are continuing their consolidative patterns as the Cable pops in reaction to encouraging CCC data. That being said, gold seems to be following the broad-based sideways movement of the Dollar as investors await the Fed’s monetary policy decision. Although the Fed is expected to keep its monetary policy unchanged, any slight tightening of its monetary policy stance in response to recent unemployment and consumption data could yield Dollar strength and gold weakness. However, if the Fed downplays the recent upturn in economic data and affirms its past monetary policy, then we may witness a bounce in gold and weakness in the Dollar. Regardless gold and the FX markets could be in for a bit of volatility as investors digest today’s economic data along with the Fed’s upcoming decision. Hence, investors should monitor activity in the FX markets, particularly in the EUR/USD and AUD/USD. Any significant setbacks in these currency pairs could drag gold lower due to the precious metal’s negative correlation with the Dollar.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 12/11, 12/9, 11/13, and 11/10 lows. Furthermore, the psychological $1100/oz level could serve as a reliable technical support should it be tested. As for the topside, gold faces topside technical barriers in the form of 12/11,12/9 and 12/7 highs along with the psychological $1150/oz and $1175/oz levels.

Present Price: $1130.60oz

Resistances: $1134.47/oz, $1141.42/oz, $1147.54/oz, $1152.45/oz, $1158.98/oz, $1164.29/oz

Supports: $1128.34/oz, $1123.03/oz, $1115.27/oz, $1110.77/oz, $1105.05/oz, $1100.15/oz

Psychological: $1100/oz, $1150/oz, $1175/oz

Gold Stabilizes with Dollar

Gold has continued to avoid a retest of the psychological $1100/oz level, finding support above 12/11 lows and our 4th tier uptrend line. The precious metal is experiencing a bit of intraday strength after U.S. economic data printed mixed. Although PPI came in 10 basis points above analyst expectations, U.S. manufacturing and production data sent a mixed signal. Hence, investors are taking today as an opportunity to lock in gains on the Dollar. The EUR/USD, GBP/USD, and AUD/USD are all stabilizing from intraday lows, supporting today’s consolidation in gold. However, volatility could pick up tomorrow with more key data from the EU, UK, and U.S. along with the Fed’s monetary policy decision. Although the Fed is expected to keep its monetary policy unchanged, any slight shift in its monetary policy stance in response to recent unemployment and consumption data could yield Dollar strength and gold weakness. However, if the Fed downplays the recent upturn in economic data and affirms its past monetary policy, then we may witness a bounce in gold and weakness in the Dollar. Naturally, the abundance of fundamental economic data releases has the potential to move the market as well. Hence, investors should monitor activity in the FX markets as investors react to tomorrow’s events. That being said, the EUR/USD and Cable are flirting with some important uptrend lines. Any significant setbacks in these currency pairs could drag gold lower due to the precious metal’s negative correlation with the Dollar.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 12/11, 12/9, 11/13, and 11/10 lows. Furthermore, the psychological $1100/oz level could serve as a reliable technical support should it be tested. As for the topside, we’ve placed a downtrend line on our chart, albeit a steep one. Additionally, gold faces topside technical barriers in the form of 12/11,12/9 and 12/7 highs along with the psychological $1150/oz and $1175/oz levels.

Present Price: $1121.60oz

Resistances: $1123.03/oz, $1128.34/oz, $1134.47/oz, $1141.42/oz, $1147.54/oz, $1152.85/oz

Supports: $1115.27/oz, $1110.77/oz, $1105.05/oz, $1100.15/oz, $1097.29/oz, $1088.30/oz

Psychological: $1100/oz, $1150/oz, $1175/oz

Gold Continues Avoids Retest of $1100/oz

Gold has managed to avoid a retest of the psychological $1100/oz level thus far. The precious metal is about where we left it on Friday as we witness consolidative patterns in the FX markets. Gold has been under quite a bit of selling pressure since the beginning of the month, so consolidation is a healthy technical development for the time being. That being said, the EUR/USD and GBP/USD are testing the patience of their uptrend by consolidating just above their respective key uptrend lines. Hence, another wave of Dollar strength could result in a sizable leg down in both currency pairs, meaning gold could follow suit considering its negative correlation to the Greenback. As a result, investors should keep an eye on the major Dollar crosses as we receive another set of key economic data from the U.S., EU, and Britain. The EU will release ZEW Economic Sentiment data followed by CPI and RPI figures from the UK. However, the spotlight could be on the U.S. since it will release its PPI, Empire Index, Industrial Production, TIC Long-Term Purchases, Capacity Utilization Rate, and Industrial Production. Should America’s econ data outperform once again it will be interesting to see whether the FX markets experience another wave of broad-based Dollar strength.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 12/9, 11/13, and 11/10 lows. Furthermore, the psychological $1100/oz level could serve as a reliable technical support should it be tested. As for the topside, we’ve placed a downtrend line on our chart, albeit a steep one. Additionally, gold faces topside technical barriers in the form of 12/9 and 12/7 highs along with the psychological $1150/oz and $1175/oz levels.

Present Price: $1122.90oz

Resistances: $1123.03/oz, $1128.34/oz, $1134.47/oz, $1141.42/oz, $1147.54/oz, $1152.85/oz

Supports: $1115.27/oz, $1110.77/oz, $1105.05/oz, $1100.15/oz, $1097.29/oz, $1089.12/oz

Psychological: $1100/oz, $1150/oz, $1175/oz

Gold Continues Decline with Strengthening Dollar

Gold is continuing its recent downturn as the Dollar strengthens in reaction to more negative debt news. Standard & Poor’s downgraded Spain’s credit outlook to negative in conjunction with discouraging news concerning the debt loads of Dubai and Greece. The discouraging developments in regards to government debt have delivered a negative psychological blow to investors, resulting in strength in both the Dollar and Yen as investors head for safety. Additionally, gold has been on an incredible run since breaking past its psychological $1000/oz barrier. Therefore profit taking in gold is not too surprising and could end up being a positive development for gold’s uptrend should economic fundamentals print positively.

Investors will be receiving a key set of Aussie employment data during the Asia trading session tomorrow morning. Gold has been strongly correlated with the AUD/USD and EUR/USD, meaning investors should eye the Aussie’s reaction to tomorrow morning’s data releases. That being said, investors may also want to monitor the EUR/USD’s interaction with our approaching uptrend lines along with November lows should they be tested. Any noteworthy technical setbacks in the EUR/USD or AUD/USD could result in further downward pressure in gold.

Technicaly speaking, gold still has multiple uptrend lines serving as technical cushions along with intraday and 12/08 lows. However, should our 1st and 2nd tier uptrend lines give way, the currency pair may opt to retest its psychological $1100/oz level. The $1100/ozlevel could prove to be a strong psychological support should it be tested. As for the topside, we’re still not able to confidently place a downtrend line due to the lack of hisorical perspective. However, gold does face technical obstacles in the form of 12/08, 11/23, and 11/26 highs along with the psychological $1150/oz, $1175/oz and $1200/oz levels.

Present Price: $1138.10oz

Resistances: $1141.42/oz, $1145.50/oz, $1149.18/oz, $1153.67/oz, $1161.84/oz, $1165.11/oz

Supports: $1134.47/oz, $1129.98/oz, $1126.71/oz, $1123.03/oz, $1117.72/oz, $1113.22/oz

Psychological: $1100/oz, $1150/oz, $1175/oz, $1200/oz

Gold Sinks Below $1200/oz

Gold has dropped back below its highly psychological $1200/oz after another set of encouraging U.S. employment data. Gold has reacted negatively to the positive U.S. news as the Dollar experiences broad-based strength and the S&P futures pop. The reversal in correlation between the Greenback and equities is the key story right now, and the positive correlation is having a negative impact on gold since the precious metal is normally positively correlated with the Dollar. Furthermore, gold has been overdue for a pullback following its incredible run. That being said, gold is still trading above December lows and our multiple uptrend lines. Therefore, gold’s uptrend is intact regardless of present weakness. However, investors should closely monitor the Dollar’s correlation with U.S. equities since a positive correlation between the two could result in further weakness in gold.

Meanwhile, investors should also eye the EUR/USD’s interaction with key supports should they be tested as well as the USD/JPY’s topside breakout. An extension of both trends could continue to have a negative impact on gold. Technically speaking, as we mentioned previously gold still has multiple uptrend lines serving as technical cushions along with 12/1, 11/30, and 11/27 lows and the psychological $1150/oz level. As for the topside, the psychological $1200/oz level may now serve as a topside barrier along with 12/2 and 12/3 highs.

Present Price: $1189.60/oz

Resistances: $1189.65/oz, $1194.94/oz, $1198.87/oz, $1202.74/oz, $1209.64/oz, $1216.59/oz

Supports: $1183.65/oz, $1180.14/oz, $1174.51/oz, $1168.38/oz, $1163.89/oz, $1157.76/oz

Psychological: $1200/oz, $1150/oz, 2009 Highs

Gold Pops Past $1200/oz

Gold’s incredible uptrend appears alive and well after the precious metal popped passed $1200/oz with relative ease. Gold continues to knock down barriers as investors and governments look to divest from the Dollar. Yesterday’s positive manufacturing data from China combined with the RBA’s 25 basis point increase was enough to signal that the rally of emerging economies is continuing. Hence, investors were confident enough to send gold past $1200/oz while delivering another round of Dollar weakness in succession with a rally in emerging equities. Meanwhile, investors are eagerly awaiting tomorrow’s ECB monetary policy meeting along with key econ releases from the U.S. and UK. Therefore, investors should keep an eye on activity in the Dollar over the next 24-48 hours. Should U.S. and UK data print positively and the ECB deliver a more hawkish monetary policy stance we may witness another wave of Dollar weakness, thereby sending gold higher due to its negative correlation with the Greenback. On the other hand, a retracement towards $1200/oz wouldn’t be surprising since we witnessed similar at $1100/oz and $1000/oz.

Technically speaking, gold has multiple uptrend lines serving as technical cushions in addition to 11/30 and 11/24 lows. Furthermore, the psychological $1200/oz and $1175/oz levels serve as supports should they be tested. As for the topside, we’re still unable to initiate a reliable downtrend line due to the lack of historical data. Therefore, the psychological $1200/oz level and intraday highs serve as the only technical barriers for the time being.

Present Price: $1210.05/oz

Resistances: $1214.05/oz, $1216.37/oz

Supports: $1206.24/oz, $1202.74/oz, $1198.87/oz, $1194.17/oz, $1189.65/oz, $1183.65/oz

Psychological: $1200/oz, $1175/oz, 2009 Highs

Gold Challenges $1200/oz

Gold is knocking at its psychological $1200/oz level as the precious metal benefits from a return to the risk trade. The combination of in line Chinese manufacturing data combined with another 25 basis rate increase from the RBA has boosted investor confidence recently dented by the Dubai debt issue. The Dollar has responded with broad-based weakness while the S&P futures fight for some topside separation beyond their highly psychological 1100 level. Weakness in the Dollar and strength in U.S. equities are developments supportive of gold’s uptrend, allowing investors to set new all-time highs with a bit of confidence. Meanwhile, investors should monitor the reaction of U.S. equities to today’s ISM Manufacturing PMI and Pending Home Sales releases. A breakout in the S&P futures could help gold climb above its psychological $1200/oz level. Additionally, investors should keep an eye on the EUR/USD’s interaction with November highs and our 3rd tier downtrend line since gold is positively correlated to the currency pair.

Technically speaking, gold has multiple uptrend lines serving as technical cushions in addition to 11/30 and 11/24 lows. Furthermore, the psychological $1175/oz and $1150/oz levels could serve as supports should they be tested. As for the topside, we’re still unable to initiate a reliable downtrend line due to the lack of historical data. Therefore, the psychological $1200/oz level serves as the only technical barrier for the time being.

Present Price: $1191.85/oz

Resistances: $1195.55/oz, $1198.87/oz

Supports: $1189.65/oz, $1184.85/oz, $1180.42/oz, $1176.73/oz, $1174.15/oz, $1168.25/oz

Psychological: $1200/oz, $1175/oz, $1150/oz

Gold Pops Back Above $1175/oz

Gold has strengthened well from Friday’s selloff, popping back above the psychological $1175/oz level as the EUR/USD and AUD/USD move higher. Investors seeming to be brushing aside the Dubai debt issue, and are reacting by challenging 1100 again in the S&P. Gold is finding comfort in the preference for risk amid an increase in global uncertainty. That being said, there are quite a few key data releases coming from China, the UK, and the U.S. over the next 24 hours which could move the markets. Therefore, gold may be looking to the upcoming fundamental releases before deciding whether to tackle $1200/oz, or submit to recent downside pressure resulting from risk-aversion and profit-taking. Regardless, gold’s impressive uptrend is alive and well with multiple positive technical forces working in its favor.

Gold has quite a few uptrend lines in place and the $1150/oz level could prove to be a technical cushion along with 11/27 and 11/17 lows should they be tested. 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 levels serve as technical barriers along with 11/26 highs. For the time being, investors should monitor the EUR/USD’s interaction with our trend lines along with the S&P’s ability to climb back above 1100. A breakout in either could help boost gold due to correlative forces.

Present Price: $1176.70/oz

Resistances: $1178.54/oz, $1182.37/oz, $1186.5/oz, $1194.82/oz

Supports: $1173.02/oz, $1170.16/oz, $1165.57/oz, $1161.90/oz, $1156.88/oz, $1149.37/oz

Psychological: $1175/oz, $1200/oz, $1150/oz

Gold Sells Off Sharply As Dollar Runs

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

Gold On The Rise Once Again Breaking All Time Highs!!!

The U.S. dollar plummeted throughout yesterday's trading session, reaching its lowest against the Japanese yen in nearly 14 years, at a time it fell against a basket of foreign currencies. However, the major drop influenced gold to clearly rise and achieve its highest at 1193.40 yesterday, before closing at $1192.10 per ounce in New York by 0.05%. Today, gold continued to appreciate to record its highest at 1195.00 before slightly dropping.

The major spike gold witnessed was something no one could have dreamt of in previous years, but with the credit crisis and economic recession the global economy has been facing; pushed investors towards gold as a safe haven and when the global economy exited the recession, the dollar plunged in the a sharp bearish wave, thus increasing gold's attractiveness for investors, traders and central banks around the world; therefore causing it to spike.

Nonetheless, the rise in markets was not limited to gold only; stock indices rose yesterday alongside the spike in European stock indices. We also witnessed a rise in commodity indices; the S&P GSCI index gained by 12.88 points and closed at 514.74 points in NY, appreciating alongside altitudes, tools and energy commodities; whereas the RJ/CRB COMMODITY index gained by 6.15 points due to precious metals overall appreciation.

Meanwhile, platinum closed on highs yesterday by 1.80% at the same time as silver gained by 2.00%, where platinum closed at 1473.00 and silver at $18.84 per ounce for each of them. This spike precious metals witnessed was less than what gold faced, which signifies that there are non-speculative powers in the gold market where gold is requested as a safe haven.

Today at precisely 02:23 EST; precious metals witnessed a drop which arose due to existing fears within financial markets that China will take real steps to put a stop to the excessive growth in the economy, specifically the industrial sector, fearing a bubble forming in the economy.

Meanwhile, gold depreciated today trading at 1186.00; whereas silver traded at 18.60, which was the lowest witnessed between the three precious metals, assuring that the power behind these profit-taking operations are speculative; silver dropped by 1.27%. However, platinum fell by 0.41% to trade at 1467.00.

Chances of witnessing gold appreciate more prevails, in conjunction with the dollar sharp plummet; where these levels near the psychological block at $1200 per ounce, where we could see corrections and sharp trades if the medium term remains to the upside, especially since commodity and price bubbles have started to form around the world in correlation with crude stabilizing above $75; all of which benefit gold's rising glory.

Gold Is On The Rise Despite Current Conditions

Precious metals dropped throughout yesterday's trading session at a time U.S. and European stock indices declined, alongside crude witnessing a fall yesterday. Silver managed to drop by 0.59% to close trades at 18.47 in New York; whereas platinum followed by dropping 0.55% to close yesterday in New York at 1447.00; meanwhile, gold persisted on finish off trading with gains by 0.35% to close at $1168.20 per ounce.

Meanwhile, precious metals today rose (precisely at 02:44 EST); where gold is trading at 1177.20 rising by 0.77%, and setting a new all time high; silver, on the other hand, compensated its loss yesterday by appreciating today by 1.25% to trade at 18.70; meanwhile, platinum is trading with gains by 0.69% at $1457.00 per ounce.

However, crude's drop throughout yesterday's trading session did not force gold to close on a low in New York; whereas today the dollar's plummet and crude's rise helped gold maintain its bullish trend. Also, the fed yesterday stated that for the first time extremely low interests rates could be behind the uncertainty in inflationary levels, where expectations regarding inflation are uncertain; therefore, pushing gold to ascend and at the same time attracting more investors towards gold as a safe haven. Nonetheless, U.S. consumer confidence notably rose and opposed expectations for a possible drop due to a demand wave for gold; although the continuous rise of consumer confidence could cause overall demand on precious metals.

Presently, worries are set on the slow pace in growth in the U.S. economy, in addition to suffering from a possible return of instability that would harm commodity prices, however, it does provide expectations of a drop in consumer demand on essential commodities, thus leading to commodity indices' depreciating yesterday; the S&P GSCI index plummeted and closed by 8.41 points, where it helped in raising oil inventory; whereas the RJ/CRB COMMODITY index witnessed a drop by 2.69 points and closed at 272.26, where non-gold precious metals played a major role in the index's plummet.

The U.S. economy managed to expand by 2.8% throughout the third quarter, but growth was revised lower from the initial estimate of 3.5%. On the other hand, we see that Japanese exports dropped the least in a year, despite of the improvement seen in the Merchandise trade balance, worries were focused on the banking sector.

All these facts make us expect gold to appreciate, whereas other precious metals are facing volatile fluctuations. The rise we still predict for gold is set over the medium term, since current gold prices are high and could trigger volatility and profit-taking waves every once in while. However, the initial target at $1300 per ounce, compared to current demand and medium term expectations.

Gold Rockets Towards $1175/oz

Gold is consolidating along our 3rd tier uptrend line as the S&P futures bobble around 1100 and the EUR/USD fluctuates between trend lines. The reaction to today’s U.S. GDP and Consumer Confidence releases have been relatively quiet thus far, implying that activity may be winding down in advance to the Thanksgiving holiday. Gold has responded by holding onto yesterday’s impressive gains towards $1170/oz on the heels of more dovish comments from Fed officials. That being said, the Fed will release its Meeting Minutes this afternoon PST. If the Fed’s minutes further support extending loose monetary policies, then it will be interesting to see whether the gold responds with another surge higher as investors and central banks divest from the Dollar. Meanwhile, investors will receive some key U.S. and EU data points tomorrow, meaning the markets could experience a slight jolt of activity before Thanksgiving Day. Therefore, investors should continue to eye the EUR/USD’s present interaction with our trend lines and its highly psychological 1.50 level since the currency pair is normally positively correlated with gold.

Technically speaking, we’re unable to place any notable topside barriers or downtrend lines on our chart due to the lack of historical perspective. Therefore, the psychological $1175/oz and $1200/oz levels appear to be the only topside technicals at work for the time being. As for the downside, we continue to move our multiple uptrend lines higher while 11/20 lows and the psychological $1150/oz level serve as technical cushions.

Present Price: $1167.20/oz

Resistances: $1170.16/oz, $1173.02/oz

Supports: $1163.85/oz, $1160.69/oz, $1152.65/oz, $1150.09/oz, $1139.50/oz, $1132.01/oz

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

Gold Strikes Another Record High On Inflation And Economic Woes

Gold defied a rebound in the dollar on Monday and powered to a record on safe-haven buying, driven by growing worries about inflation and a drop in U.S. stocks that stirred doubt about the economic outlook. Bullion, which has gained around 32 percent so far in 2009, struck a succession of lifetime highs in November as sentiment turned extremely bullish after India acquired 200 tons of the precious metal from the International Monetary Fund. 'You've got more high profile hedge funds visibly investing in gold. That's yet another factor encouraging moves into gold by the wider investor community,' said David Barclay, commodity strategist at Standard Chartered in Hong Kong. Gold is trading at $1,166 as of 8:36am, GMT with a bullish trend. Gold's Pool-position is 87% Long, meaning that most Finotec clients are buying the precious metal.

Gold Consolidates Around $1140/oz with Broad-Based Dollar Strength

Gold is finally experiencing a period of consolidation following its incessant rise to $1150/oz. Gold is consolidating around the $1140/oz level, right along our 3rd tier uptrend lien while setting lower highs in the process. Gold’s weakness comes in reaction to pullbacks in the EUR/USD, AUD/USD, and GBP/USD. Additionally, the S&P futures have ducked back below their highly psychological 1100 level. All of these correlative forces are trimming gains and gold and allowing bulls to take a breather as investors closely monitor recent uncertainty in the FX markets. That being said, despite heavy losses in the Cable, the EUR/USD and AUD/USD have experienced what could be considered healthy pullbacks at this point. However, should losses in these currency pairs accelerate investors could opt to take further profits in gold since the precious metal tends to exert a negative correlation with the Dollar. After all, some sizable profit taking in gold wouldn’t be abnormal because it has been on a tear since breaking through $1100/oz.
Meanwhile, investors are eagerly awaiting next week’s economic data, most notably housing data and U.S. Prelim GDP on Tuesday. Should global econ data continue to disappoint, investors may choose to divest from riskier assets including gold since it tends to be negatively correlated with the Dollar and positively correlated with the S&P futures.
Technically speaking, we’re still hesitant to place a downtrend line on gold until we witness further consolidation/profit-taking. That being said, gold’s psychological $1150/oz continues to serve as the only viable topside technical due to the lack of historical perspective. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 11/16 lows and the psychological $1100/oz level should conditions deteriorate over the near-term.

Present Price: $1139.20/oz

Resistances: $1143.05/oz, $1145.61/oz, $1150.09oz, $1152.65/oz

Supports: $1137.60/oz, $1134.71/oz, $1130.54/oz, $1127.24/oz, $1123.51/oz, $1118.39/oz

Psychological: $1150/oz, $1100/oz

Gold Touches Fresh Dollar High as Inflation Rises, Housing Stalls

December gold futures closed up $4.60 at $1,144.00 yesterday. Prices hit another fresh contract and all-time record high yesterday, amid a weaker U.S. dollar. Prices closed near mid-range. Gold bulls have the solid overall near-term technical advantage. There are no early clues of a market top being close at hand for gold. Gold bulls' next upside price objective is to produce a close above solid technical resistance at $1,200.00. Bears' next downside price objective is closing prices below solid technical support at $1,100.00. First resistance is seen at yesterday's all-time high of $1,153.40 and then at $1,160.00. Support is seen at yesterday's low of $1,136.00 and then at $1,130.00.

Gold Hits Psychological $1150/oz Level

Gold is continuing its incessant rise higher despite very limited participation from the Dollar. The EUR/USD and AUD/USD are both fluctuating between their respective uptrend and downtrend lines while the S&P futures hover around their highly psychological 1100 level. Gold has ignored its usual positive correlations since breaking through its psychological $1100/oz level and seems to have a mind of its own. Gold’s aggressive bull movements without a sizable depreciation of the Dollar is a bit puzzling. Therefore, investors should question if/and when gold’s correlations will lock back into place.

Meanwhile, U.S. equities have held up well considering the continual wave of negatively mixed econ data. Despite today’s slightly positive CPI numbers, both Building Permits and Housing Starts registered disconcerting declines. Therefore, America’s recent fundamentals are indicating a cool down in the nation’s economic recovery. Hence, the S&P’s resilience above its highly psychological 1100 level has been impressive. However, it feels like something’s got to give and investors will eventually need to favor one direction or another in U.S. equities and the Dollar. Investors should closely monitor the EUR/USD, GBP/USD, and AUD/USD for a directional statement since gold has been more closely correlated to the Dollar than equities so far this year.

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 11/17 and 11/16 lows along with the psychological $1100/oz level.

Present Price: $1147.70/oz

Resistances: $1150.09oz, $1152.65/oz

Supports: $1143.05/oz, $1137.60/oz, $1134.71/oz, $1130.54/oz, $1127.24/oz, $1124.27/oz

Psychological: $1150/oz, $1100/oz

Gold Trades Lower as Dollar Gains

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.

Gold Rises To Another Record High At $1,118 As The Dollar Continues Its Descent

Gold hit a record high of $1,118 an ounce on Wednesday, stirred by renewed buying the precious should benefit from expectations that an erratic economic recovery will keep U.S. interest rates low. The metal is now poised for more gains, analysts said, with the weak dollar helping gold build on a rally that began last week after the IMF sold 200 tons of bullion to India's central bank, raising the prospect of more official sector buying. The greenback index initially fell a quarter of a percent to a 15 month low and the euro rose to a two-week peak within sight of last month's high of just over $1.5060. Gold is trading at $1,117 as of 21:08pm, GMT with a bullish trend. Gold's Pool-position is 70% Long, meaning that most Finotec clients are buying the precious metal.

Gold Retraces to $1100/oz

Gold is continuing its charge above $1100/oz after both China and Japan’s economic data outperformed analyst expectations. In addition to positive data flows from the Far East, investors received a couple statements from Fed officials yesterday that further supported the outlook that the central bank will keep its loose monetary policy intact for the foreseeable future. The combination of these developments has resulted in Dollar weakness and topside movements in gold. Despite yesterday’s retracement to $1100/oz, gold has once again shown a preference for its incredible uptrend. Although another $1100/oz retracement may not be out of the question, gold’s topside separation is certainly encouraging for bulls. Meanwhile, investors should continue to keep an eye on the EUR/USD’s interaction with 1.50 as well as the AUD/USD’s ability to create some topside separation from its October highs. Gold has been more closely correlated with these two major Dollar crosses, meaning any significant movements would likely impact the precious metal.

Technically speaking, the only topside barrier we’re able to form right now is intraday highs due to a lack of historical perspective. As for the downside, gold has several uptrend lines serving as technical supports along with 11/10 and 11/06 lows. Furthermore, the psychological $1100/oz level should continue to work in gold’s favor should it be tested again.

Present Price: $1116.25/oz

Resistances: $1117.87/oz

Supports: $1110.59/oz, $1107.50/oz, $1104.71/oz, $1100.41/oz, $1097.63/oz, $1093.33/oz

Psychological: $1100/oz.

Gold Retraces to $1100/oz

Gold has retraced to $1100/oz following yesterday’s break above as investors snap up the Dollar in reaction to overbought conditions and disappointing econ data points from both Britain and the EU. Meanwhile, the S&P futures are staring at their own psychological 1100 level along with previous 2009 highs. Therefore, today’s consolidation appears healthy thus far as investors take a breather in anticipation of tonight’s wave of econ data from China. China will release Industrial Production, CPI, CPI, and Fixed Asset Investments. Investors will likely be paying particularly close attention to China’s econ data since the nation’s economy has been an engine in the global recovery. An outperformance in China’s data could give the risk trades a nice boost, whereas a cool down could result in further Dollar strength. Therefore, strong econ data out of China could help gold separate itself from $1100/oz despite today’s retracement. On the other hand, disappointing China data could lead investors to close out some risk trades as well as take profits in gold.

Technically speaking, we’re still unable to place any sort of reliable downtrend line on gold due to a lack of historical perspective. Therefore, gold’s key barrier to further topside gains appears to rest in the hands of the psychological $1100/oz level. As for the downside, gold several uptrend lines serving as technical cushions along with 11/06 lows. Meanwhile, investors should keep an eye on the EUR/USD’s battle with 1.50. Gold has been strongly correlated with the EUR/USD. Therefore, any significant breakout in the currency pair could help drive gold higher.

Present Price: $1101.85/oz

Resistances: $1105.32/oz, $1108.20/oz, $1110.59/oz

Supports: $1100.97/oz, $1097.65/oz, $1094.78/oz, $1091.43/oz, $1087.59/oz

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

Gold Breaks Past $1100/oz

Gold has finally broken past its psychological $1100/oz level after a week-long debate. The precious metal is finding strength from a broad-based weakness in the Dollar as the Aussie, Euro, and Pound all log solid gains against the Greenback. Furthermore, India’s large purchase of IMF bullion is probably increasing speculation that global central banks are beginning to diversify their reserves and decrease their reliance on the Dollar. Gold is a direct beneficiary of such a trend since it is a notorious safe haven asset. Meanwhile, we also notice sizable topside movements in both crude and the S&P futures, indicating today’s activity in Gold’s correlations are all creating an environment supportive of the precious metal’s psychological breakout.

Gold’s near-term reaction should remain reliant on the Dollar’s reaction to upcoming econ data. In focus will be tomorrow’s EU ZEW Economic Sentiment number followed by a wave of Chinese data late Tuesday EST. If tomorrow’s econ releases should impress and the Dollar reacts negatively, gold would likely be a beneficiary, and vice versa. Technically speaking, gold’s movement beyond $1100/oz is another key uptrend statement from the precious metal. Although there’s the possibility gold may retrace towards the upper end of the $1100/oz psychological zone, the precious metal’s technicals are still supportive of its medium-term uptrend. It’s difficult to place too many topside resistances until gold cools down, while the precious metal has multiple uptrend lines along with 11/6 lows serving as technical cushions.

Meanwhile, investors should keep an eye on the EUR/USD’s interaction with its highly psychological 1.50 level along with our 2nd and 3rd tier downtrend lines. Gold has been strongly correlated with the EUR/USD lately, meaning a topside breakout in the Euro could push gold highs, adding more weight to tomorrow’s ZEW data.

Present Price: $1106.80/oz

Resistances: $1108.20/oz, $1110.59/oz

Supports: $1103.64/oz, $1100.97/oz, $1098.11/oz, $1094.78/oz, $1090.71/oz, $1088.55/oz

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

Gold Steps Back after Peaking Past $1100/oz

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.

Gold Consolidates After Huge Gains

Gold is consolidating around the $1090/oz level after its impressive topside breakout earlier this week. Investors are monitoring the Dollar as the markets digest today’s monetary policy decisions from the ECB and BoE while contemplating a test of the psychological $1100/oz level. Regardless, this week’s breakout was a sign of strong support for gold’s uptrend since the precious metal moved without full participation from the Dollar. However, the sustainability of gold’s new near-term uptrend will likely depend upon a broad-based devaluation in the Dollar since the two are negatively correlated. Hence, investors should keep a sharp on the interaction of gold’s correlations with tier respective topside technicals, most notably the EUR/USD and AUD/USD.

Technically speaking, we’re at a loss of downtrend lines and historical perspective again. Therefore, the psychological $1100/oz level serves as our only trustworthy topside technical for the time being. Speaking of which, gold stopped just short of $1100/oz, hinting that the level could have a near-term psychological impact on investors. 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: $1091.30/oz

Resistances: $1091.49/oz, $1092.77/oz, $1095.77/oz, $1100.04/oz

Supports: $1087.85/oz, $1085.28/oz, $1083.14/oz, $1079.93/oz, $1075.01/oz, $1069.89

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

Gold Tops Out Just Below $1100/oz

Gold surged past our 2nd tier downtrend yesterday after the IMF announced that India made a large bullion purchase from the monetary fund’s stockpile. Gold’s technicals were already working in the topside’s favor, making yesterday’s breakout explosive. Furthermore, gold managed to make yesterday’s key topside movement without the full cooperation of the Euro and Aussie. In fact, gold’s impressive breakout could signal another round of weakness in the Dollar. Regardless, gold’s momentum continues to work in favor of the topside as investors and governments try to diversify their assets and decrease their dependency on the Dollar. Meanwhile, central bank meetings will be in focus for the next 24-48 hours, meaning volatility in the FX markets should increase. Therefore, investors should expect further volatility in gold, especially considering the precious metal made such a bullish movement.

Technically speaking, we’re at a loss of downtrend lines and historical perspective again. Therefore, the psychological $1100/oz level serves as our only trustworthy topside technical for the time being. Speaking of which, gold stopped just short of $1100/oz, hinting that the level could have a near-term psychological impact on investors. As for the downside, we’ve readjusted our uptrend lines, giving us an idea of support to go along with the psychological $1075/oz level. Meanwhile, gold’s near-term activity could take its cue from the Dollar. Hence, investors should monitor any technical breakouts or setbacks in either the EUR/USD or AUD/USD.

Present Price: $1091.30/oz

Resistances: $1091.49/oz, $1092.77/oz, $1095.77/oz, $1100.04/oz

Supports: $1087.85/oz, $1085.28/oz, $1083.14/oz, $1079.93/oz, $1075.01/oz, $1069.89

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

Consolidation likely for gold.

Intraday bias in Gold remains neutral for the moment as it's still bounded in range of 1026.9 and 1072. Some more sideway consolidations could still be seen but after all, short term outlook will remain bullish as long as 38.2% retracement of 931.3 to 1072 at 1018.3 holds. Break of 1072 high will bring rally resumption to 1100 psychological level next. On the downside, however, decisive break of 1018.3 will indicate that recent rise has completed and deeper decline should be seen to 985.5 cluster support (61.8% retracement at 985.0) instead.

In the bigger picture, the long term up trend in Gold has resumed after taking out 1033.9 resistance firmly. Rise from 681 would likely develop into another set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is expected to extend to 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 first and then 100% projection at 1258 next. On the downside, though, break of 985.5 support will dampen this bullish view and will turn focus back to 931.3 support instead.

Gold Declines with Risk Aversion

Gold had a nice little pop yesterday as investors exited the Dollar in reaction to stronger than expected U.S. Prelim GDP data. However, as with the EUR/USD and GBP/USD, gold’s positive momentum fell short of important topside technical barriers, mostly notably $1050/oz and our 3rd tier uptrend line. Investors are now exiting their risk trades today as optimism wanes in the face of negatively mixed data. The S&P futures are also trading off by over -1% and crude over -2%. Gold is following its positive correlations to a tee today and is heading back below our 2nd tier uptrend line. Hence, markets are showing us that investor uncertainty is outweighing optimism. The positive Q3 earnings season has been priced in, and investors are now looking towards Q4 fundamental economic performance.

Despite today’s pullback in gold, the precious metal still has our 1st tier uptrend line to fall back on along with 10/27 and 10/28 lows. As for the topside, gold is facing a newly formed downtrend line along with its psychological $1050/oz level and 10/26 highs. Meanwhile, investors should monitor the EUR/USD’s ability to hold above its technical cushions along with the S&P’s battle at 1050. A large technical setback in either could drag gold lower due to their positive correlations.

Present Price: $1039.60/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.

Gold Steady At $1040 As Traders Decide On The Dollar

Gold prices steadied around $1,040 an ounce on Wednesday, staying above three-week lows hit the day before when the dollar strengthened against the euro. The dollar held gains against a basket of currencies on Wednesday while the yen rose, as investors trimmed positions in higher yielding currencies as stocks fell on weaker-than-expected U.S. consumer confidence figures. Traders and analysts said that given the rapid rise in gold prices, a pause in its rally was sensible, but the expected continuation of dollar weakness will also likely offer firm support around $1,000. Gold is trading at $1030 as of 21:33PM, GMT. Gold's Pool-Position is 82% Long, meaning that most Finotec are buying the precious metal.

Gold Stabilizes Following Monday’s Technical Setback

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.

Gold Continues to Fluctuate Within a Converging Wedge Pattern

old has highlighted the relevance of the wedge pattern we spotted last week by bouncing off of our 2nd tier uptrend line once again. Meanwhile, our downtrend line is gradually converging with our 2nd tire uptrend line, implying gold may wake from its consolidative slumber soon. Fortunately for bulls, gold continues to set higher lows while hinting at a topside preference by continually resisting a noteworthy retreat below the highly psychological $1050/oz level. All eyes remain on the Dollar, particularly the Euro and Aussie crosses. Gold has seemed to follow the EUR/USD and AUD/USD more closely than the GBP/USD and USD/JPY due to the erratic behaviors of the BoE and BoJ, respectively. Therefore, investors should eye the EUR/USD’s ability to move higher and create some space between present price and the currency pair’s psychological 1.50 level. We notice a similar consolidative pattern in the AUD/USD, so investors should watch to see if the currency pair can break above its own October highs. A breakout in either major cross could result in a similar movement in gold.

Meanwhile, the S&P futures are in a topside battle of their own. The S&P has had a lot of trouble breaking through its psychological 1100 level. A large movement above 1100 in the S&P would likely come with a broad-based depreciation of the Dollar, thereby pushing gold higher due to correlative forces. As a result, investors should pay attention to the S&P’s reaction to upcoming Q3 earnings reports and econ data releases, most notably tomorrow’s CB and HPI data along with Wednesday’s Advance GDP and Durable Goods numbers. That being said, the presence of key econ and earnings releases among key psychological levels across the board presents the opportunity for high volatility should results steam in either highly positive or negative.

In terms of technicals, the topside barriers remain our makeshift downtrend line along with previous 2009 highs and the psychological $1075/oz and $1100/oz levels. As for the downside, the psychological $1050/oz level continues to serve as an important technical cushion along with our 1st and 2nd tier uptrend lines.

Present Price: $1058.50/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

Gold Continues to Fluctuate Within a Converging Wedge Pattern

Gold has highlighted the relevance of the wedge pattern we spotted last week by bouncing off of our 2nd tier uptrend line once again. Meanwhile, our downtrend line is gradually converging with our 2nd tire uptrend line, implying gold may wake from its consolidative slumber soon. Fortunately for bulls, gold continues to set higher lows while hinting at a topside preference by continually resisting a noteworthy retreat below the highly psychological $1050/oz level. All eyes remain on the Dollar, particularly the Euro and Aussie crosses. Gold has seemed to follow the EUR/USD and AUD/USD more closely than the GBP/USD and USD/JPY due to the erratic behaviors of the BoE and BoJ, respectively. Therefore, investors should eye the EUR/USD’s ability to move higher and create some space between present price and the currency pair’s psychological 1.50 level. We notice a similar consolidative pattern in the AUD/USD, so investors should watch to see if the currency pair can break above its own October highs. A breakout in either major cross could result in a similar movement in gold.

Meanwhile, the S&P futures are in a topside battle of their own. The S&P has had a lot of trouble breaking through its psychological 1100 level. A large movement above 1100 in the S&P would likely come with a broad-based depreciation of the Dollar, thereby pushing gold higher due to correlative forces. As a result, investors should pay attention to the S&P’s reaction to upcoming Q3 earnings reports and econ data releases, most notably tomorrow’s CB and HPI data along with Wednesday’s Advance GDP and Durable Goods numbers. That being said, the presence of key econ and earnings releases among key psychological levels across the board presents the opportunity for high volatility should results steam in either highly positive or negative.

In terms of technicals, the topside barriers remain our makeshift downtrend line along with previous 2009 highs and the psychological $1075/oz and $1100/oz levels. As for the downside, the psychological $1050/oz level continues to serve as an important technical cushion along with our 1st and 2nd tier uptrend lines.

Present Price: $1058.50/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

Gold Consolidates while Setting Higher Lows

Gold continues to consolidate around the psychological $1500/oz level while setting lower highs and higher lows. This pattern tells us there is a wedge forming, which is why we installed a downtrend line. Gold’s sideways movement reflects investor indecisiveness in terms of whether to keep the risk rally rolling. Analysts and bankers are barking from both sides as doubt creeps back into the broader market. However, Q3 earnings are beating expectations and although econ data has been negatively mixed, it’s solid nonetheless. Meanwhile, the Fed’s Beige Book shows the central bank is not even close to tightening liquidity, meaning Dollar’s near-term downward trajectory is intact. However, the ECB is getting antsy and may opt to take some dovish action should the EUR/USD breakout to the topside again. On the other hand, actions speak louder than words, and overall central banks continue to gravitate towards a more hawkish monetary stance. This is good news for gold’s near to medium-term outlook since the precious metal is negatively correlated with the Dollar.

All eyes will be on the EUR/USD’s interaction with 1.50 and the Cable’s ability to separate itself further from 1.65. We recognize consolidation in the AUD/USD and technicals continue to favor the topside in all of these currency pairs. Therefore, gold’s present consolidation is not necessarily a bad thing since the process develops a new support base should investors decide to extend the precious metal’s rally towards $1100/oz. The EU will be releasing a wave of PMI numbers tomorrow to go along with Britain’s Prelim GDP and America’s Existing Home Sales data. Therefore, gold and the FX markets could experience heightened volatility as the week comes to a close.

Technically speaking, gold faces topside barriers in the form of our downtrend line along with 10/21, 10/20, and 10/14 highs. As for the downside, gold has our 1st and 2nd tier uptrend lines serving as technical cushions along with 10/21 and 10/16 lows. Additionally, the psychological $1500/oz level should continue to play a lead role as long as it’s in the picture.

Present Price: $1055.85/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

Gold's Consolidation Still in Progress.

Gold's consolidations from 1072 high is still in progress. As noted before, a short term top might be in place with bearish divergence conditions in 4 hours MACD and RSI. Some more consolidation would likely be seen with risk of another fall. But after all, we'd expect downside to be contained by 38.2% retracement of 931.3 to 1072 at 1018.3 and bring rally resumption. Above 1072 will target 1100 psychological resistance next.

In the bigger picture, the strong break of 1033.9 high confirms that long term up trend in Gold has resumed. Rise from 681 would likely develop into another set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is expected to extend to 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 first and then 100% projection at 1258 next. On the downside, though, break of 985.5 support will dampen this bullish view and will turn focus back to 931.3 support instead.

Gold Consolidates around $1050/oz

Gold has bounced off our 2nd tier uptrend line and is presently consolidating around the psychological $1050/oz level as investors take profits in the EUR/USD, AUD/USD, and the S&P futures. Investors seem to be taking a breather ahead of public addresses from the RBA, Fed, and BoE along with BoJ minutes. Quotes from the central banks are bound to be FX movers since investors will be looking for their respective monetary stances. Meanwhile, gold continues to be more closely tied to the Euro and Aussie than the Pound and Yen. Yesterday reinforced this observation when gold contracted while the Pound and Yen surged. Therefore, investors should pay particularly close attention to activity in the EUR/USD and AUD/USD along with their major cross-pairs. Today’s Q3 earnings and U.S. econ data came in negatively mixed and are increasing investor uncertainty in regards to the rest of the earnings season. The negative development in earnings has put gold’s uptrend on pause.

Technically speaking, gold appears to be creating a top, yet it’s uncertain how lasting consolidation will be. We expect continued volatility in the FX markets next week, so investors should get a better idea of whether investors are willing to test $1075/oz or opt to lock in more profits. Gold’s longer-term bull trend is alive and well considering the historic breakout last week. Meanwhile, the $1050/oz zone should continue to serve as a psychological pull until the Euro or Aussie make a next noteworthy directional move. Gold has multiple uptrend lines serving as cushions along with 10/9 and 10/7 lows. However, a drop beneath our 1st tier uptrend line could result in a retracement towards September highs. Therefore, gold is stuck in an uncertain place right now. The precious metal’s impressive run supports the argument for further profit taking. However, gold would be inclined to participate to the topside should the Dollar experience another round of weakness against the Euro and Aussie. As for the topside, gold faces resistance in the form of 10/8 and 10/14 highs along with the psychological $1075/oz and $1100/oz levels.

Present Price: $1054/oz

Resistances: $1054.82/oz, $1058.54/oz, $1061.40/oz, $1065.15/oz, $1068.06/oz.

Supports: $1049.57/oz, $1046.40/oz, $1042.96/oz, $1039.01/oz, $1035.58/oz

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

Gold Trades off 2009 Highs.

Gold is trading off 2009 highs after failing to close above $1070/oz on the 4-hour. Gold’s weakness comes despite strength in both the Euro and the Pound today. Meanwhile, the AUD/USD seems to be topping off in a sign that investors are locking in some profits. Therefore, it appears gold is finally setting a top despite how temporary it may be. Gold has been on a tear this month and it is healthy for the precious metal to be experiencing some profit taking and consolidation. However, investors should take note that the EUR/USD is separating itself from our key 3rd tire downtrend line and September highs. Therefore, the currency pair may be starting a new leg up even though it must deal with the psychological 1.50 level. Gold’s positive correlation with the EUR/USD should play a key role in determining the precious metal’s near-term path. Therefore, investors should eye the currency pair’s interaction with 1.50 should it be tested.

Speaking of psychological levels, gold and the S&P future are quickly approaching their respective 1100 levels. Additionally, the Cable is trading around 1.60 and the USD/JPY is fluctuating near 90. Therefore, the markets are reaching an important point concerning the continuation of the bull trend. Regardless, we have no reason to alter our positive outlook on gold trend-wise unless the FX markets experience a rapid appreciation of the Dollar. Meanwhile, gold’s movements for the rest of the week will rely upon the Dollar and its reaction to further Q3 earnings and U.S econ data. If these two fundamental elements continue to outperform, then gold has the ability to test $1100/oz fairly soon. As for the downside, gold has technical cushions in the form of multiple uptrend lines, 10/13 and 10/9 lows, and the psychological $1050/oz level.

Present Price: $1061.45/oz

Resistances: $1061.40/oz, $1065.45/oz, $1068.30/oz

Supports: $1058.54/oz, $1054.82/oz, $1052.80/oz, $1050.67/oz, $1048.60/oz, $1045.23/oz

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

Gold Sets New Highs on Strong EUR/USD.

Gold is trading off fresh 2009 highs as the Dollar logs gains against the Euro and Aussie. However, this is after the EUR/USD popped past our key 3rd tier downtrend line and September highs. While a retracement beneath our 3rd tier downtrend line is possible, today’s movement in the EUR/USD could spell accelerated gains in the near future. The final obstacle the EUR/USD must overcome is its highly psychological 1.50 level. The reason we speak of the EUR/USD in relation to gold is because the precious metal has achieved its historic breakout without full cooperation from the Euro. The EUR/USD has been tightly correlated with gold throughout the year, implying gold’s accomplishment overcame quite a few obstacles of its own. Therefore, as we mentioned previously, a topside breakout in the EUR/USD could fuel further gains in gold. As a result, we feel a pressing need to highlight any noteworthy developments regarding the EUR/USD’s topside potential. Gold hasn’t given evidence of creating a lasting top since we have no historical reference to work with. Hence, gold’s uptrend is alive and boundless until we are able to initiate some credible downtrend lines.

Meanwhile, investors should eye near-term performances of both the AUD/USD and EUR/USD since gold should be positively correlated with these two major Dollar crosses. Furthermore, upcoming Q3 earnings and U.S. econ data should impact the FX markets, meaning gold will be influenced as well. Outperformance of earnings and data implies gains in U.S. equities and consequently serve as positive catalysts for gold’s uptrend, and vice versa. Technically speaking, it’s difficult to place topside technicals on gold other than the psychological $1075/oz and $1100/oz levels. As for the downside, the precious metal has developed a few technical cushions, including our multiple uptrend lines along with 10/13, 10/10, and 10/7 lows. Additionally, the psychological $1050/oz level should serve as a technical support.

Present Price: $1057.40/oz

Resistances: $1058.54/oz, $1061.40/oz, $1068.30/oz

Supports: $1054.82/oz, $1052.80/oz, $1050.67/oz, $1048.60/oz, $1045.23/oz, $1042.96/oz

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

Gold at $1052 Sharply Higher in Euros & Sterling, But Financial Press Still Unconvinced

The Gold Price ticked higher Monday morning in London, rising back through $1050 an ounce as world stock markets jumped and the Euro gained vs. the Dollar.

Government bonds also rose, as did crude oil, base metals and soft commodities.

London's AM Gold Fix was set 4.7% above last Monday's start at $1052 an ounce, while Eurozone investors now Ready to Buy Gold saw the price stand 4.0% better at a new 7-month high of 714 euro an ounce.

Gold priced in Sterling stood more than 6.1% above its level of last Monday morning, trading almost one-fifth higher at 666 pound an ounce from the mid-summer low.

'Today could be quiet,' says one London dealer in a note, 'as the US is on holiday and volumes low.'

'A short consolidation at this level would create a strong base for the next leg higher though,' says another.

'We do remain concerned that gold as an 'inflation trade' is both expensive and premature,' says a research note from J.P.Morgan in New York, 'but the flows speak for themselves.

'Gold has been the overwhelming beneficiary of investment allocations to commodities all year,' the former investment bank says, setting price targets of $1,000 an ounce between now and end-Dec., with a rise to $1,100 looking 'likely' for early 2010.

Last week saw betting on Gold Futures and options swell by 10% to a 15-month record of 635,000 contracts.

The 'net long' position held by hedge funds and other speculative players - meaning the number of bullish bets minus bearish contracts - rose to a fresh record of 259,000.

On the other side of this leveraged, derivative market, the 'net short' position held by commercial players such as miners, refineries and bullion banks hit a near record of 304,000 contracts.

'Other than being nice to have, the case for investing in gold looks to me like another example of the greater fool theory,' writes Anthony Hilton in the Evening Standard.

'[Gold] makes sense just as long as there is someone out there willing to pay even more for the metal than you did.'

'Gold's usefulness as an inflation hedge has been exaggerated,' agrees David Smith of London's Sunday Times - also judging gold's performance from the one-day spike of $850 an ounce, hit on 21st Jan. 1980.

'With many countries suffering deflation, inflation worries look misplaced.'

'Let's remember that the US bond market is many multiples bigger than the gold market,' says fixed-income strategist George Goncalves at broker Cantor Fitzgerald.

'As a bond analyst my money is on the bond market being right about inflation. There is no inflation now or in the near-term.'

'Gold is a volatile, high-risk asset that pays no income,' says Jeff Salway in The Scotsman, 'while the current high means investors have almost certainly missed out on the biggest price jumps.'

'Our target of $1,100 for gold in Q4:09 stands,' counters Walter de Wet at South Africa's Standard Bank here in London.

'While we see few inflationary pressures in large developed markets, this should not affect the Gold Price negatively. We believe Q4 seasonal jewelry demand, less scrap coming to the market (relative to previous periods when gold traded above $1,000) and investment demand...should see gold trade higher at the same Dollar/Euro exchange rate.'

Standard Bank's analysts expect the US Dollar to continue falling vs. the European single currency between now and March, dropping from $1.48 per Euro to $1.58 or worse.

'There's been talk about [Gold at] $1500, and I see that as perfectly achievable,' said Arthur Hood, CEO of Australia's second-biggest gold miner, Lihir Gold, in an interview this weekend.

'There's been a constant upward trend and we're not surprised by this at all. On the supply and demand side, there's gently declining mine supply but physical demand for gold is staying constant or actually increasing.'