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.