By Fast Brokers – Gold surged yesterday, blowing past its last downtrend line and nearly touched all-time highs before ducking back below $1240/oz. Regardless, yesterday’s move was very bullish and although the precious metal could undergo near-term consolidation a test of May highs may be in the cards. Meanwhile, it will be important to see a topside follow through sometime this week or gold could run the risk of setting a double top over the medium-term. Either way, there are more reasons to be bullish than bearish considering the deterioration of the Euro. Although the Cable and USD/JPY has been relatively stable during the EUR/USD’s latest downturn, should other major dollar pairs follow suit this could push gold beyond May highs due to the precious metal’s safe haven status. The data wire will be relatively quiet across the globe until Thursday’s flurry of data and central bank meetings. Hence, psychological forces will be in the driver’s seat over the next 48 hours, meaning investors should pay particularly close attention to EU news wires for any new developments.
Technically speaking, gold faces technical barriers in the form of intraday and May highs. Additionally, the psychological $1250/oz level should serve as a solid technical barrier should it be reached. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 6/2 and 6/7 lows. Furthermore, the psychological $1200/oz should serve as a solid technical support should it be tested. Mean while, gold is running low on topside technical barriers, normally a positive sign for the near-term.
Present Price: $1237.38/ oz
Resistances: $1238.16/oz, $1241.94/oz, $1246.86/oz, $1249.25/oz
Supports: $1235.75/oz, $1233.63/oz, $1232.22/oz, $1229.56/oz, $1227.63/oz, $1125.20/oz
Psychological: $1200/oz, $1250/oz
(click chart to enlarge)
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