By Fast Brokers – Gold is surging higher today, testing its December 2009 highs as the precious metal benefits from its win-win position as we explained yesterday. Gold is in a unique spot right now considering its status as a safe haven along with its negative correlation with the greenback. Investors are beginning to question the potential effectiveness of the EU’s rescue package, sending the risk trade lower across the board. Such uncertainty and risk aversion is clearly acting as a positive catalyst for gold right now. In addition to uncertainty in the EU, China’s SCI officially entered a bull market and the UK parliament is in the midst of intense negotiations. Hence, it’s tough to find stability anywhere at the moment, making gold a desirable purchase for the near-term, or at least until uncertainty settles. The data wire will pick back up tomorrow, beginning with Australia home loans and ending with U.S. trade balance data. Hence, considering the amount of news stories floating around, the combination of key data could make for another active 24 hours.
Technically speaking, gold faces technical barriers in the form of intraday and December 2009 highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday lows and the highly psychological $1200/oz area. Gold is beginning to run low on technical barriers, normally a positive sign concerning near to medium term performance.
Present Price: $1219.23/ oz
Resistances: $1222.07/oz, $1225.66/oz
Supports: $1215.41/oz, $1211.97/oz, $1209.69/oz, $1207.76/oz, $1204.58/oz, $1202.01/oz
Psychological: $1200/oz, December 2009 highs
(click chart to enlarge)
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