Gold charged past its psychological $1150/oz level today after solid Trade Balance data from China sparked a return to the risk trade. The FX markets experienced a jolt in activity today with the Dollar selling off across the board, a positive catalyst for gold considering their negative correlation. Gold has recovered nicely from December 2009 lows and continues to build upon its 2010 momentum. However, the precious metal appears to be cooling off right now as it tops around $1160/oz, just shy of 12/8 highs. We notice similar movements in the EUR/USD and GBP/USD, meaning gold's correlative behavior is back in full swing. Meanwhile, investors are looking ahead to tomorrow's U.S. Trade Balance data. It will be interesting to see what impact this data point has on the FX markets considering the Greenback has rallied recently on positive U.S. data. Hence, solid U.S. Trade Balance data could place a speed bump in gold's current uptrend.
Technically speaking, gold has multiple uptrend lines serving as technical cushions along with intraday, 1/8, 12/30, and 12/22 lows. Meanwhile, gold's psychological $1150/oz area could serve as a technical cushion. As for the topside, gold faces technical barriers in the form of 12/7 and 11/18, 11/23, and 11/27 highs along with the psychological $1175/oz level.
Present Price: $1152.65/oz
Resistances: $1156.12/oz, $1160.50/oz, $1165.20/oz, $1168.96/oz, $1173.34/oz, $1178.36/oz
Supports: $1150.48/oz, $1146.72/oz, $1143.90/oz, $1139.51/oz, $1137.01/oz, $1130.43/oz
Psychological: $1175/oz, $1150/oz, December highs and January lows
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