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