By Fast Brokers – Gold experienced a 2nd retracement to the psychological $1100/oz level after topping out around $1120/oz. Gold’s weakness came with pullbacks in both the EUR/USD and AUD/USD as investors locked in profits and headed for safety amid slight investor uncertainty. However, gold is bouncing off $1100/oz and our 2nd tier uptrend line as the EUR/USD, AUD/USD, and S&P futures recover some of their intraday losses despite a wave of negative econ data from both the EU and U.S. EU GDP and U.S. consumer sentiment data releases all printed below analyst expectations, indicating the global economic recovery may be more gradual than anticipated. The S&P futures initially reacted negatively to the news, yet investors are trying to pull the futures back up towards 1100. However, it’s difficult to imagine the markets will end the day positively considering there’s not much of a silver lining to today’s data flow.
Regardless, gold has held strong above $1100/oz despite two retracements. Therefore, the precious metal’s upward momentum is still intact, though the uptrend’s patience is being tested. After all, gold has been on a furious rally lately and some profit taking would not be out of the ordinary. Meanwhile, investors should continue to monitor activity in both the EUR/USD and AUD/USD since gold is more closely correlated to these two major Dollar crosses.
Technically speaking, we’re still not able to place a downtrend line on our chart with confidence, meaning 11/12 highs will serve as the next topside barrier. As for the downside, gold still has multiple uptrend lines serving as technical cushions along with intraday, 11/10, and 11/05 lows. Meanwhile, $1100/oz could continue to have a say due to its psychological relevance as of late.
Present Price: $1107.05/oz
Resistances: $1108.08/oz, $1110/59/oz, $1114.39/oz, $1117.87/oz $1122.54/oz
Supports: $1103.09/oz, $1100.46/oz, $1097.83/oz, $1093.33/oz, $1088.64/oz, $1083.12/oz
Psychological: $1100/oz.
Market Commentary provided by Fast Brokers.
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