By Fast Brokers
Gold did take off after getting above the key $900/oz level after a report that China has increased its gold reserves by 76% since 2003. However, gold’s run has topped out after Durable Goods Orders beat analyst expectations this morning. The S&P futures are poised to breakout, meaning the precious metal could quickly return a lot of its recent gains. Additionally, we wouldn’t be surprised to see gold retrace to $900/oz simply due to the psychological significance of the level. Furthermore, the release from China’s Xinhua news agency regarding the nation’s gold reserves is a bit vague. Saying China has increased its reserves of gold by 76% since 2003 doesn’t necessarily mean the buildup has happened recently. We’re talking about a six year period in which China’s overall reserves skyrocketed. Is China really diversifying from the Dollar, or is the government playing mind games by stating a figure spread over six years? One can never be sure. However, we opt for the mind games explanation. Either way, China is sending a clear message it plans on diversifying from the Dollar in the present and future, which is likely why gold is experiencing so much strength from the news. Regardless, gold’s commitment to $900/oz.+ future is a big move and investors should take notice. If the precious metal can close above our 3rd tier uptrend line on the 4-hour we could see more large near-term gains. Fundamentally we find resistances of $909.66/oz, $913.47/oz, $916.16/oz, $919.54/oz, and $922.69/oz. To the downside, we see supports of $907.64/oz, $905.85/oz, $903.83/oz, $900.41/oz, and $898.15/oz. Gold is currently trading at $907.65/oz.
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
