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