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
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