By Fast Brokers – Gold has dropped below the psychological $1100/oz level as the Dollar’s recent strength seems to finally be taking its toll on the precious metal due to their usual negative correlation. Gold’s bull run continues to unwind as investors lock in profits and shuttle money back into the Dollar. That being said, gold does have a few more near-term uptrend lines we can form. However, should our new 1st tier uptrend line give way, gold could potentially be in for a more protracted pullback towards the highly psychological $1000/oz level. Meanwhile, investors should monitor the ability of the EUR/USD and GBP/USD to consolidate and form new bases following their December downturns. Should the Dollar consolidate and top out, gold may hit bottom nearby. That being said, the EUR/USD and GBP/USD have both dropped beneath key uptrend lines in the past week, implying the Dollar could be in for more gains over the medium-term. Investors will now focus in on today’s release of U.S. Existing Home Sales followed by tomorrow’s New Home Sales. Additionally, the BoE will release its Monetary Policy Minutes. Hence, the FX markets could be in for more volatility before Christmas. Should upcoming data points exceed analyst expectations, investors may snap up the Dollar and continue to take profits in gold, and vice versa.
Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 11/05 and 11/03 lows. As for the topside, gold faces topside technical barriers in the form of intraday, 12/21,12/15, and 12/7 highs along with the psychological $1100/oz and $1150/oz levels.
Present Price: $1093.10/oz
Resistances: $1096.47/oz, $1100.15/oz, $1105.05/oz, $1110.77/oz, $1115.27/oz, $1123.03/oz
Supports: $1088.30/oz, $1082.58/oz, $1079.61/oz, $1074.96/oz, $1070.53/oz, $1063.56/oz
Psychological: $1100/oz, $1075/oz, $1150/oz
Market Commentary provided by Fast Brokers.
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