Gold Showing Positive Correlation With EUR/USD, GBP/USD And U.S. Stocks

Gold is bouncing up while exhibiting a positive correlation with the Euro and Pound.  The precious metal managed to avoid a retest of $900/oz. and stabilized on our previous bottom-end of $908.66/oz.  We’re noticing a clear theme in terms of correlation.  Gold is opting for a positive correlation with the EUR/USD, GBP/USD and U.S. equities.  Therefore, we encourage investors to analyze Gold’s correlations before executing a trade on the precious metal.  Gold’s uptrend has been rescued once again with our last-resort 1^st tier uptrend fading into the distance.

However, the medium-term downtrend line is bearing down on price, and we may witness some sideways movement until the two reach an inflection point.  Our downtrend line should prove to be a formidable challenge with the possibility of a triple-top approaching.

Ultimately, the path of Gold will rely on the state of U.S. equities and the American economy.  If the S&P can’t recover and equities head for another leg down, we could see Gold and commodities follow suit in an exhibition of widespread deflation.

Fundamentally we see resistances of $922.45/oz, $924.74/oz, $928.16/oz, $930.72/oz and $933.86/oz.  To the downside, find supports of $919.32/oz, $916.98/oz, $915.16/oz, and $911.78/oz.  Gold is currently trading at $921.85/oz.

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