By Fast Brokers – Gold is battling its psychological $1180/oz level as investors digest the EU’s decision to supply Greece with roughly $150 billion over 3 years. Thus far the Euro has reacted negatively to the news, capping gains in gold. Additionally, it wouldn’t be surprising to see a little profit taking considering the run the precious metal has been on the past month. Should uncertainty continue in the EU and UK this could benefit gold over the near-term since the precious metal is an ideal safe haven when investors have fewer places to turn. The news and data wires will get hectic mid week with U.S. employment data, UK parliamentary elections, and an EU monetary policy decision. Should these events prove damaging for the risk trade gold may be able to test its highly psychological $1200/oz level. Additionally, should these events prove beneficial for the risk trade gold may also benefit due to its usual negative correlation with the greenback. Hence, gold seems to be in a win-win position right now. However, there are some tough obstacles hanging over head, meaning the topside could prove to be more challenging if the precious metal approaches $1200/oz.
Technically speaking, gold is continuing to set fresh April highs as the month comes to a close, certainly a positive development for the precious metal in terms of momentum. That being said, gold is now squaring its sights on the highly psychological $1200/oz level and previous all-time highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday, 4/28 and 4/27 lows. Additionally, the psychological $1170/oz and $1160/oz areas could serve as solid cushions should they be tested.
Present Price: $1177.30/ oz
Resistances: $1178.77/oz, $1181.58/oz, $1184.84/oz, $1187.12/oz, $1189.74/oz, $1191.69/oz
Supports: $1175.89/oz, $1174.22/oz, $1172.43/oz, $1170.77/oz, $1169.32/oz, $1162.21/oz
Psychological: $1200/oz, $1180/oz, $1170/oz, $1160/oz, April highs and lows
(click chart to enlarge)
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