Gold Floats Around $1100/oz Despite Risk Aversion

Gold is floating just beneath its highly psychological $1100/oz level despite broad-based risk aversion in the FX markets.  The Cable, Aussie, USD/JPY and EUR/USD have all made large legs down today amid fresh uncertainty in Greece.  Additionally, economic data from around the globe was less than encouraging, particularly the rise in weekly U.S. Unemployment Claims.  Today’s negative psychological and fundamental developments have led investors for safety, reflected in the downturn in the risk trade.  However, gold is holding up very well considering the rise in the Dollar and Yen.  Gold has been negatively correlated with the Dollar, making its present stability intriguing.  Meanwhile, the risk trade is trying to right itself at the moment, so it will be interesting to see if gold can pop back above $1100/oz regardless of strength in the Dollar.  The UK and U.S. will both release GDP data tomorrow, meaning volatility in the FX markets could end the week on a volatile note.  Hence, gold may follow suit if the Dollar’s run continues.

Technically speaking, gold faces multiple downtrend lines along with 2/24 and 2/23 highs.  As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday and 2/12 lows.  Furthermore, the psychological $1100/oz level could continue to play an influential role over the near-term.

Present Price: $1093.80/oz

Resistances: $1094.34/oz, $1096.04/oz, $1098.51/oz, $1100.74/ oz, $1103.10/oz, $1106.18/oz

Supports: $1091.58/oz, $1089.87/oz, $1087.66/oz, $1085.21/oz, $1083.25/oz, $1080.79/oz

Psychological: $1100/oz, $1125/oz, February highs and lows

(click to enlarge)

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.