By Fast Brokers – Gold has broken through previous April highs and is testing the patience of 3/17 highs and the psychological $1135/oz level. Strength in gold comes amid renewed weakness in the risk trade as the Euro and Pound take a beating. Fresh uncertainty in Greece is sending government bond yields higher and investors divesting from the risk trade in succession. Additionally, the Cable is being hit by the announcement of parliamentary elections being held on May 6th and the concept of a hung parliament slowly becoming reality. Risk aversion has sent investors towards gold and higher yielding currency pairs. Hence, gold’s usual negative correlation with the Greenback has gone astray as investors digest negative psychological developments. Meanwhile, the precious metal is separating itself further from key downtrend lines running through March 3rd highs, or the $1150/oz area. Therefore, gold could have some more topside momentum left for the near-term. The Fed now comes into focus with the release of FOMC meeting minutes this afternoon, and investors will be paying attention to see whether the central bank’s economic outlook has improved in the wake of positive U.S. data. Although the U.S. will be quiet on the data front tomorrow, investors will receive some important data from the UK along with the BoJ’s monetary policy announcement during the Asia trading session. Investors should also keep an eye on the data wires for any more developments in Greece.
Technically speaking, gold faces topside technical barriers in the form of the psychological $1135/oz area and 3/17 highs. As for the downside, gold has fresh uptrend lines serving as technical cushions along with intraday, 4/2, and 4/1 lows.
Present Price: $1132.90/ oz
Resistances: $1133.09/oz, $1134.05/oz, $1135.01/oz, $1135.88/oz, $1137.04/oz
Supports: $1131.72/oz, $1130.76/oz, $1129.86/oz, $1128.21/oz, $1127.28/oz, $1126.56/oz
Psychological: $1130/oz, March highs and April lows
(click chart to enlarge)
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