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.
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