Gold Outlook: Can The Precious Metal Continue Its Rally?

Gold got shot down yesterday (Tuesday), extending early losses despite a late selloff in U.S. equities.  Gold managed to regain some of its losses, but the damage has been done.  While the uptrend isn’t busted, the precious metal is surely playing with fire.

If gold can’t stay within a comfortable range of our new 1^st tier uptrend line, the precious metal could collapse back into its downtrend and in effect negate its impressive gains from last week.

That being said, last week’s run was monumental and backed by high volume.  Therefore, one is led to believe gold can regain its composure and continue on its uptrend.  We are looking towards equities for guidance assuming the negative correlation will come into play.  Then again, these are not normal times, so we are not relying upon the correlation with as much conviction as we would have in the past.

Fundamentally we see resistances of $927.78/oz, $931.98/oz, $935.34/oz, and $939.27/oz.  To the downside, find supports of $924.69/oz, $919.65/oz, $916.85/oz, and $913.20/oz.  The $900/oz. area should serve as a highly psychological cushion should gold’s decline reach this point.  Gold is currently trading at $926.05/oz.

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