By Fast Brokers – Gold is creeping higher as investors divest from the risk trade. While investors may expect gold to climb higher during moments of heightened uncertainty, it seems the precious metal is hesitating at its highly psychological $1200/oz level. However, should May lows in the EUR/USD and Cable give way this could push gold back above $1200/oz due to its status as a safe haven. Meanwhile, investors are waiting on U.S. CB consumer confidence as they monitor EU headlines. The Euro came under heavy selling pressure yesterday after the IMF issued a warning on Spain and the government took control of a regional bank. Additionally, news leaked that North Korea readied its military should South Korea attack after it became clear that the North sank the South’s submarine. Though a military conflict is highly unlikely, should things go south this could help gold regain its upward momentum. We’ll get some more key data from the U.S. tomorrow along with public statements from Shirakawa and Bernanke. Hence, it wouldn’t be surprising to see markets stay active over the next 24 hours.
Technically speaking, gold faces technical barriers in the form of intraday and 5/7 highs. Additionally, the psychological $1200/oz level should serve as a solid technical barrier should it be reached. As for the downside, gold still has multiple uptrend lines serving as technical cushions along with intraday and 5/21 lows. Furthermore, the $1150/oz level should serve as a strong technical cushion should it be tested.
Present Price: $1193.95/ oz
Resistances: $1195.20/oz, $1197.08/oz, $1199.91/oz, $1202.59/oz, $1205.26/oz
Supports: $1190.92/oz, $1187.93/oz, $1184.46/oz, $1181.62/oz, $1178.97/oz.
Psychological: $1200/oz, $1150/oz
(click chart to enlarge)
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