Gold Floats Around $1100/oz Despite Risk Aversion

Gold is floating just beneath its highly psychological $1100/oz level despite broad-based risk aversion in the FX markets. The Cable, Aussie, USD/JPY and EUR/USD have all made large legs down today amid fresh uncertainty in Greece. Additionally, economic data from around the globe was less than encouraging, particularly the rise in weekly U.S. Unemployment Claims. Today’s negative psychological and fundamental developments have led investors for safety, reflected in the downturn in the risk trade. However, gold is holding up very well considering the rise in the Dollar and Yen. Gold has been negatively correlated with the Dollar, making its present stability intriguing. Meanwhile, the risk trade is trying to right itself at the moment, so it will be interesting to see if gold can pop back above $1100/oz regardless of strength in the Dollar. The UK and U.S. will both release GDP data tomorrow, meaning volatility in the FX markets could end the week on a volatile note. Hence, gold may follow suit if the Dollar’s run continues.

Technically speaking, gold faces multiple downtrend lines along with 2/24 and 2/23 highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday and 2/12 lows. Furthermore, the psychological $1100/oz level could continue to play an influential role over the near-term.

Present Price: $1093.80/oz

Resistances: $1094.34/oz, $1096.04/oz, $1098.51/oz, $1100.74/ oz, $1103.10/oz, $1106.18/oz

Supports: $1091.58/oz, $1089.87/oz, $1087.66/oz, $1085.21/oz, $1083.25/oz, $1080.79/oz

Psychological: $1100/oz, $1125/oz, February highs and lows

Gold Drops Below $1100/oz

Gold is trading back below its highly psychological $1100/oz level amid weakness in the Cable and Aussie. Gold’s large leg down during today’s Asia trading session is a bit mysterious since the precious metal exhibited a relative weakness. That being said, investors should keep an eye on activity in the Dollar. Investors will have their eyes fixed on U.S. New Home Sales and Bernanke’s Congressional testimony. Statements from Bernanke have the potential to create considerable volatility in the FX markets. Hence, should Bernanke give any hints regarding a tighter monetary policy from the Fed, this could favor the Dollar and place further downward pressure on gold. On the other hand, should Bernanke reiterate a loose monetary policy for the foreseeable future the risk trade may be able to continue its stabilization and keep gold around $1100/oz. However, the risk trade is tilting lower ahead of Bernanke, so it will be interesting to see how today’s trading session plays out. Meanwhile the psychological $1100/oz level could continue to have an influence on gold. Volatility in the FX markets could continue tomorrow with the release of Durable Goods Orders along with statements from King and Bernanke. Investors should also keep an eye on the EUR/USD and Cable and their ability to hold above February lows.

Technically speaking, gold faces multiple downtrend lines along with intraday and 2/22 highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 2/18 lows and the highly psychological $1100/oz level should it be tested.

Present Price: $1094.25/oz

Resistances: $1096.04/oz, $1098.51/oz, $1100.74/ oz, $1106.18/oz, $1107.91/oz

Supports: $1093.81/oz, $1091.58/oz, $1089.87/oz, $1087.66/oz, $1085.21/oz, $1083.25/oz

Psychological: $1100/oz, $1125/oz, February highs and lows

Gold Sinks with Negative Global Data

Gold is trading well off Monday highs as investors exit the risk trade in the wake of more negative fundamental data from around the globe. The selloff began with weaker than expected French Consumer Spending and German Ifo Business Climate data from the EU along with discouraging UK BBA Mortgage Approvals data. Additionally, the U.S. just reported a sizable step back in CB Consumer Confidence. Hence, the fundamental picture is altogether negative today, resulting in sizable pullbacks in the USD/JPY, EUR/USD, and Cable. The negative reaction of the risk trade is dragging gold lower due to its usual negative correlation with the Greenback. It will be interesting to see whether the EUR/USD and Cable can hold above previous February lows and salvage their previous upward momentum, for another setback in the risk trade could weigh on gold due to correlative forces. However, gold is still trading above $1100/oz, which has proven to be an influential psychological zone in the past. The U.S. will release New Home Sales tomorrow in succession with Bernanke’s Congressional testimony. As a result, volatility could increase in the next 24 hours as investors look for further insight from Bernanke in regards to the Fed’s future monetary policy plans.

Technically speaking, gold faces multiple downtrend lines along with intraday and 2/22 highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 2/18 lows and the highly psychological $1100/oz level should it be tested.

Present Price: $1106.10/oz

Resistances: $1106.18/oz, $1107.91/oz, $1110.64/ oz, $1113.36/oz, $1116.08/oz, $1118.31/oz

Supports: $1103.46/oz, $1100.74/oz, $1098.51/oz, $1096.04/oz, $1093.81/oz, $1090.84/oz

Psychological: $1100/oz, $1125/oz, February highs

Gold Consolidates with Risk Trade

Gold is holding strong well above Friday lows and its highly psychological $1100/oz. However, the precious metal is trading off of Friday highs as the risk trade consolidates across the board. We recognize profit taking in the EUR/USD and Cable. That being said, these two currency pairs still have quite an uphill battle to face on the route to recovery from this year’s surge in the Dollar. Gold is performing well considering the uncertainty in the risk trade and the precious metal’s negative correlation with the Greenback. On the other hand, gold’s resilience could also signal that the risk trade is oversold. Therefore, investors should keep an eye on activity in the major Dollar pairs to determine whether we are witnessing a real bottom in the risk trade or just another bounce. Much of that will depend on upcoming economic data releases and whether there is more unexpected news from the EU’s PIIGS nations. Furthermore economic uncertainty in the EU could lead investors back towards the Dollar and out of gold. Gold broke through some key downtrend lines over the past few trading sessions, meaning momentum is pointing in favor of the topside. However, FX markets have been extremely volatile lately, meaning the tide has the potential to turn quickly.

Technically speaking, gold faces multiple downtrend lines along with 2/17 and 2/19 highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 2/18 lows and the highly psychological $1100/oz level should it be tested.

Present Price: $1121.10/oz

Resistances: $1121.19/oz, $1123.67/oz, $1126.15/ oz, $1128.21/oz, $1130.93/oz, $1133.40/oz

Supports: $1117.32/oz, $1115.34/oz, $1113.61/oz, $1111.63/oz, $1107.91/oz, $1105.93/oz

Psychological: $1100/oz, $1125/oz, February highs

Gold Holds Above $1100/oz Despite Dollar Rally

Gold managed to hold above Thursday’s lows and the highly psychological $1100/oz level despite broad-based strength in the Dollar in reaction to the Fed’s surprise decision to raise the discount rate. The Fed’s decision shocked FX markets after the bell, sending investors rushing towards the Dollar after interpreting the Fed’s announcement as a signal that the exit strategy from loose liquidity has begun. Although gold did experience sizable down-bars on the 4-hour, the pullback wasn’t nearly as intense as what occurred in the EUR/USD. Hence, stability in gold could signal an overreaction in the major Dollar pairs. However, should the risk trade continue its freefall gold may be inclined to follow suit due to its usual negative correlation with the Greenback. Regardless, resilience in gold the past 24-48 hours has been interesting and should be watched by investors. Meanwhile, volatility in the FX markets could remain volatile over the near-term considering the extent of this week’s pullback. Trading ranges could be wide until the Dollar settles and a new normal is established. However, it remains to be seen whether this will translate into gold’s activity.

Technically speaking, gold faces multiple downtrend lines along with 2/18 and 2/17 highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 2/18 lows and the highly psychological $1100/oz level should it be tested.

Present Price: $1114.30/oz

Resistances: $1115.98/oz, $1117.72/oz, $1119.70/ oz, $1121.19/oz, $1123.67/oz, $1126.15/oz

Supports: $1114.24/oz, $1112.01/oz, $1110.03/oz, $1108.29/oz, $1106.56/oz, $1103.33/oz

Psychological: $1100/oz, $1125/oz, February highs and lows

Gold Declines On Firmer Dollar

Precious-Gold slipped for the second day, paring some of its weekly advance, as the U.S. dollar strengthened which reduced that appeal of the metal as an alternative investment.

Yesterday, gold shed $11.00 or 0.98% to close at $1106.55 an ounce. Gold Price was set in London on Wednesday at $1019.00 per ounce during the PM fixing inclining from $1118 25 during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, stood at to 1,106.37 metric tons on February 17.

Spot gold is traded at $1100.66 an ounce, a little bit above strong resistance at $1100.00, after recording a high of $1109.15 and a low of $1097.66. The shiny metal dropped suddenly the previous day after the IMF mentioned it would sell gold in open market to generate additional sources for lending. IMF announced in September it is planning to sell 13% of its gold reserves; thus the IMF's intension was known previously which shows that the dollar's rebound accelerated the fall.

The dollar index, which tracks the dollar movements against a basket of major currencies, bounced for the second day to 80.63, reaching the highest in 9 months versus the euro, after breaching strong support at 80.07 which reduced demand on all dollar-denominated commodities.

The greenback probably will continue its rally that started since December on improved outlook for the U.S. which is increasing speculations the FED would raise interest rate faster than other Central Banks. Production and housing data released yesterday beat estimates ahead of the release of other important U.S. data later on today which are expected to show further progress. On the other hand, investors are wary of buying the euro on concerns the European Central Bank will need to raise money for supporting Greece.

With regard to other precious metals, platinum edged down to $1506.50 from the opening at $1508.00; palladium inclined to $425.50 from $427.50; and silver remained unchanged at to $15.75

GOLD To Test Key Resistance

GOLD (Futures): With a follow-through higher on its Monday gains currently seen, risk of further corrective recovery momentum now targets its strong swing high at its Feb 03’10 high at 1,125.00. We expect a cap at this level to turn the commodity back down but if that fails to materialize, more strength could be seen targeting its Jan 20’10 high at 1,141.48. Its daily RSI is bullish and pointing higher supporting this view. To the downside, immediate support lies at the 1,104.08 level, its Jan 25’10 high with a turn below there allowing for more downside pressure towards the 1,072.14/1,073.95 levels with a break below there pushing Gold further lower towards the 1,044.20 level, its YTD low. A loss of the latter will resume its short term downtrend towards the 1,030.85/1,026.55 levels, its Mar’08 high/Oct 28’09 low and then the 986.67 level, its Oct’09 low. On the whole, Gold continues to build on its corrective recovery and now targets the 1,125.00 level and possibly higher.

Gold Little Changed, Above $1095

Precious-Gold slightly changed on Monday in thin trading in markets due to holidays and as the dollar remains firm.

Last Friday, gold shed $0.20 or 0.02% to close at $1093.15 an ounce. Gold Price was set in London on Friday at $1082.00 per ounce during the PM fixing declining from $1078.25 at the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, stood at 1,106.37 metric tons on February 12.

Spot gold is traded at $1095.20 an ounce after recording a high of $1097.06 and a low of $1091.60. Prices remain under pressure due to the dollar's continuing advance against majors which is reducing the appeal of the commodity as an alternative investment.

Meanwhile, the greenback is traded near the highest level in 9 months versus the euros and one-week high against the yen. The 16-nation currency is showing weakness ahead of the EU finance ministers' 2-day meeting staring today in Brussels, where they will introduce measures to bailout Greece and put rescue plan for possible debt woes in other European economies, especially Spain and Portugal.

Investors are waiting for detailed plan for endorsing Greece which may help the euro to pare some of its losses. The U.S. dollar is gaining on expected faster recovery in the U.S.; Bernanke, the Federal Reserve Chairman said last week they will raise discount rate and start unwinding stimulus.

On the other hand, European shares advanced today ahead of the meeting, while Asian stocks dropped on concerns that China will cool its economic growth at the time where some Asian markets are closed for the Lunar New Year holiday, while U.S. markets are also closed for Presidents Day.

With regard to other precious metals, platinum inched up to $1512.50 from the opening at $1510.50; palladium plummeted to $413.50 from $415.70; and silver ticked up to $15.49 from $15.47.

Gold Declines As The Dollar Strengthens

The shiny metal slid for the second day as the dollar advanced against majors, thereby reducing demand on the metal as an alternative investment.

Yesterday, gold shed $4.10 or 0.37% to close at $1109.60 an ounce. Gold Price was set in London on Wednesday at $1115.25 per ounce during the PM fixing declining from $1118.50 at the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, slipped 1.58 metric tons to 1,110.34 metric tons on February 3.

The shiny metal is negatively impacted by the dollar's rally that started in December. The improved U.S. data and outlook for the U.S. economy are endorsing the Federal currency. The dollar index, a gauge of the dollar movements versus a basket of major currencies, surged to 79.63 from the day's opening at 79.41.

Meanwhile, the greenback is traded near its highest level in seven months versus the 16-nation currency as debt woes in European economies are raising concerns and thereby weighing on the euro. However, the dollar's direction may be determined largely after the non-farm payrolls report due tomorrow.

Moreover, the dollar's rally adversely affected all dollar-denominated commodities. S&P GSCI added 2.73 points to 501.39 and RJ/CRB Commodity pushed up 2.61 points to 270.58 the previous day, whereas crude oil declined to near $76.17 a barrel from $76.97 in the preceding day's closing.

Spot gold inclined to $1102.80 an ounce today, recording a high of $1111.10 and a low of $1102.75. The yellow metal is facing resistance at $1113.00 while gaining support at $1100.00.

With regard to other precious metals, platinum edged down to $1541.40 from the opening at $1559.40, whereas palladium plunged to $427.00 from $432.70.

Gold Fluctuates Wildly as Investors Digest Data

Gold has been all over the place today. The previous metal climbed higher during the Asia trading session as the risk rally continued in light of Australia’s encouraging Trade Balance data coupled with news the EU is accepting Greece’s plan to reduce its fiscal debt. However, gold reversed course and dove back to intraday lows after U.S. ADP Non-Farm Employment Change data printed stronger than analyst estimates. The positive headline ADP number sent investors back towards the Dollar in a hurry, registering large down bars in the EUR/USD and AUD/USD in the process. The Dollar’s rally resulted in an accompanying decline in gold due to correlative forces. Meanwhile, investors are awaiting U.S. Services PMI data due shortly. That being said, FX markets and gold could remain active throughout the remainder of the session. Speaking of volatility, the ECB and BoE will make monetary policy decisions during tomorrow’s trading session along with weekly U.S. Unemployment Claims. Hence, gold and the Dollar could remain active for the next 24-48 hours. Investors should monitor behavior in the major Dollar pairs closely for any new direction signals for this could be a telling sign for gold.

Technically speaking, gold’s earlier rally sent the precious metal beyond our 2nd tier downtrend line, a very positive development considering it runs through 2010 highs, or the $1160/oz area. However, gold has dipped back below our 2nd tier and remains under the influence of behavior in the Dollar. Hence, there are still downward forces at play. Gold now faces our 2nd and 3rd tier downtrend lines to the topside along with intraday highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday and 2/2 lows.

Present Price: $1116.83/oz

Resistances: $1118.08/oz, $1121.04/ oz, $1124.86/oz, $1128.66/oz, $1132.02/oz, $1135.04/oz

Supports: $1113.71/oz, $1110.73/oz, $1107.33/oz, $1103.94/oz, $1100.55/oz

Psychological: $1100/oz, January highs and lows

Gold Drives Past $1100/oz

Gold has popped back above its highly psychological $1100/oz level despite a large step back in the AUD/USD during the Asia trading session. Outside of volatility in the Aussie, we recognize stability in both the Cable and EUR/USD as negative psychological forces subside. Consolidation and stabilization in these two currency pairs has allowed gold to gain back some lost ground from what now appear to be oversold conditions. Meanwhile, the S&P futures are logging solid gains this morning after U.S. Pending Home Sales printed above analyst expectations, continuing the theme of strong U.S. economic data. Encouraging U.S. data is proving to be a positive catalyst for gold since the precious metal is positively correlated with U.S. equities. That being said, the U.S. will release Services PMI and ADP Employment Change data tomorrow. Hence, volatility in the FX and currency markets could pick up over the next 24-48 hours. In the mean time investors should keep an eye on activity in the Dollar and take note of any further directional breakouts.

Technically speaking, gold has hopped above our 3rd tier downtrend line, a positive technical development considering our 3rd tier runs through 1/20 highs, or the $1040/oz area. Hence, gold could be in for further topside movement over the near-term should the previous metal hold above our 3rd tier downtrend line. As for the downside, we’ve readjusted our uptrend lines to compensate for today’s gains. Therefore, gold has multiple uptrend lines serving as technical cushions along with the psychological $1100/oz level.

Present Price: $1111.50/oz

Resistances: $1113.71/oz, $1117.38, oz, $1121.03/oz, $1125.92/oz, $1128.66/oz, $1132.01/oz

Supports: $1109.44/oz, $1106.40/oz, $1102.13/oz, $1099.07/oz, $1094.19/oz

Psychological: $1100/oz, January highs and lows