By Fast Brokers – Gold is undergoing a large leg dad as it participates in risk-averse flows. The Dollar is appreciating across the board in reaction to political uncertainty in the EU in regards to how to deal with Greece. However, gold was holding up relatively well until news hit that the Reserve Bank of India decided to raise its interest rates by 25 basis points. This announcement sent a shockwave throughout the FX markets and sent investors scurrying towards the Dollar. Gold experienced a windfall of selling activity as well, dropping all the way down to our key first tier uptrend line and has nearly retested its highly psychological $1100/oz level. That being said, investors should keep an eye on gold’s ability to hold these two key technical levels along with the ability of the EUR/USD and Cable to stabilize from intraday losses. The U.S. data wire will be quiet today, meaning attention will remain on today’s psychological and news developments. Data will pick up next week, meaning key risk-trade supports will likely be tested soon.
Technically speaking, gold has our first tier uptrend line serving as a technical cushion along with its highly psychological $1100/oz level. Our 1st tier runs through previous March lows, highlighting the prevalence of present levels. As for the topside, gold faces multiple downtrend lines along with 3/15 and 3/12 highs.
Present Price: $1105.80/oz
Resistances: $1106.48, $1107.27, $1108.06/oz, $1109.37/oz, $1110.43/oz, $1111.57/ oz
Supports: $1105.25/oz, $1104.46/oz, $1103.85/oz, $1103.06/oz, $1102.27/oz, $1101.40/oz
Psychological: $1100/oz, March highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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