By Fast Brokers – Gold is knocking at its psychological $1200/oz level as the precious metal benefits from a return to the risk trade. The combination of in line Chinese manufacturing data combined with another 25 basis rate increase from the RBA has boosted investor confidence recently dented by the Dubai debt issue. The Dollar has responded with broad-based weakness while the S&P futures fight for some topside separation beyond their highly psychological 1100 level. Weakness in the Dollar and strength in U.S. equities are developments supportive of gold’s uptrend, allowing investors to set new all-time highs with a bit of confidence. Meanwhile, investors should monitor the reaction of U.S. equities to today’s ISM Manufacturing PMI and Pending Home Sales releases. A breakout in the S&P futures could help gold climb above its psychological $1200/oz level. Additionally, investors should keep an eye on the EUR/USD’s interaction with November highs and our 3rd tier downtrend line since gold is positively correlated to the currency pair.
Technically speaking, gold has multiple uptrend lines serving as technical cushions in addition to 11/30 and 11/24 lows. Furthermore, the psychological $1175/oz and $1150/oz levels could serve as supports should they be tested. As for the topside, we’re still unable to initiate a reliable downtrend line due to the lack of historical data. Therefore, the psychological $1200/oz level serves as the only technical barrier for the time being.
Present Price: $1191.85/oz
Resistances: $1195.55/oz, $1198.87/oz
Supports: $1189.65/oz, $1184.85/oz, $1180.42/oz, $1176.73/oz, $1174.15/oz, $1168.25/oz
Psychological: $1200/oz, $1175/oz, $1150/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.
