By Fast Brokers – Gold has managed to gain back some ground from its 3/24 lows, yet is declining again after failing to reach $1100/oz. Gold understandably logged heavy losses yesterday as the Dollar soared across the board. Uncertainty in Greece and now Portugal sent risk traders towards the exit, a negative development for gold since it tends to be negatively correlated with the Greenback. However, it will be interesting to see if the precious metal can managed to climb back above its key $1100/oz level as the risk trade battles for stabilization. The EU summit is kicking off and will conclude tomorrow, meaning volatility could pick up as the week comes to a close. Although there has been a muted response from the Euro, the summit certainly carries the firepower to ignite volatility should investors approve/disapprove of the outcome. Hence, investors should keep an eye on the Dollar’s reaction to incoming headlines on the news wire concerning the EU. Gold dropped below a key uptrend line yesterday which runs through 2/5 levels, or the $1050/oz area. Hence, if gold can’t lock back into its uptrend soon more losses could be in store over the medium-term.
Technically speaking, gold has intraday and 3/24 lows serving as technical cushions along with the psychological $1075/oz area should it be tested. As for the topside, gold faces multiple downtrend lines along with intraday highs and the highly psychological $1100/oz level. Hence, it seems gold has an uphill battle ahead of it.
Present Price: $1091.90/oz
Resistances: $1092.23/oz, $1093.37/oz, $1094.92/oz, $1096.18/oz, $1097.26/oz, $1098.10/oz
Supports: $1089.78/oz, $1088.72/oz, $1088.01/oz, $1087.21/oz, $1085.21/oz, $1084.93/oz
Psychological: $1100/oz, March lows
(click chart to enlarge)
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