Gold’s Movement Likely To Depend On The Performance Of Stocks

Gold has posted some heavy losses over the past 24 hours, exercising its positive correlation with U.S. equities as the S&P (^GSPC) closed up over 7%.  The previous metal briefly sunk below our 1^st tier uptrend line on Tuesday, but is currently fighting back above with the S&P futures trading lower pre-market.  The condition of Gold has deteriorated overnight considering last week’s huge rally.

However, the last movements in negative territory have been backed by relatively low volume compared to March 19^th’s up-bar.  Therefore, since the large action is to the upside, we remain positive trend-wise on the precious metal as long as it can hold up around present levels.  The positive correlation with U.S. equities is alive and well, and Gold’s movement will likely depend on the performance of stocks.

If the S&P really can rocket past 800 towards 900, then we may have a change of heart with Gold.  Meanwhile, the high volatility should continue for the time being.

Fundamentally we see resistances of $935.34/oz, $939.27/oz, $942.91/oz, and $947.40/oz.  To the downside, find supports of $931.98/oz, $927.78/oz, $924.69/oz, and $919.65/oz.   Gold is currently trading at $934.20/oz.

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