By Fast Brokers – Gold is testing its psychological $1250/oz level as it breaks away from other foreseeable technical barriers. The precious metal continues to benefit from its win-win position, and this should be the case so long as investor uncertainty is so high. Austerity concerns are weighing on the EUR/USD and risk trade as a whole, leading investors towards dollar, gold, and yen. Additionally, gold tends to flex its negative correlation with the greenback when the risk trade does rally, meaning gold is in an opportune environment. However, should concern about the EU manage to abate and FX markets stabilize then gold may finally reach a more lasting top. That being said, there’s no end in sight as far as uncertainty is concerned with important economists, analysts, and central bankers placing more psychological pressure on the Euro. On the other hand, some near-term profit taking in gold wouldn’t be surprising considering the run the precious metal has been on this month.
Technically speaking, gold faces technical barriers in the form of intraday highs and the psychological $1250/oz area. 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 has run out of meaningful technical barriers, normally a positive sign concerning near to medium term performance.
Present Price: $1240.13/ oz
Resistances: $1244.32/oz, $1249.04/oz
Supports: $1239.51/oz, $1236.76/oz, $1232.64/oz, $1227.49/oz, $1225.88/oz
Psychological: $1250/oz, $1200/oz
(click chart to enlarge)
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