By Fast Brokers – Gold hit a speed bump at our 2nd tier downtrend line after the precious metal failed to garner the volume to send it past more near-term technical barriers. Gold still faces our 2nd and 3rd tier downtrend lines along with July 1st highs and the psychological $950/oz level. The fact gold hasn’t received large volume on the buy-side during its present run is a bit disconcerting. We will need to see a large technical movement above the aforementioned technical obstacles with considerable volume before we feel comfortable reinitiating our own uptrend call. However, the EUR/USD and GBP/USD have made promising developments to the upside along with U.S. equities, setting the stage for a greater commitment to the uptrend.
On a speculative note, the U.S. reported negative TIC Long-Term Purchases today despite a record gain in China’s reserves. Therefore, China may in fact be diversifying some of its new reserves from U.S. Treasuries to commodities such as gold. However, as we noted, this is purely speculation, yet the situation should be considered and deliberated. Should China’s reserves continue to grow healthfully while their central bank divests from U.S. Treasuries, this could provide relative strength to gold over the near to medium-term.
Present Price: $932.80/oz
Resistances: $934.05/oz, $935.57/oz, $937.26/oz, $939.28/oz, $941.13/oz
Supports: $932.54/oz, $930.51/oz, $928.83/oz, $927.48/oz, $925.46/oz
Psychological: $950/oz
Market Commentary provided by Fast Brokers.
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