Gold Continues Its Gradual Climb On Declining Volume

Gold has risen back above our 3^rd tier uptrend line on lackluster volume as the precious metal grudgingly participates in a weakening Dollar and rising equities.  We’re still holding our negative near-term outlook on gold as with the GBP/USD and EUR/USD due to the large volume the precious metal experienced to the downside last week.  Volume to the upside has been relatively weak, and we are not comfortable reinstating our bullish outlook on gold until we see a large, fundamental movement to the upside backed by considerable volume.

With EU and Britain economic data on the light side for the remainder of the week, all eyes turn to the U.S.  If retail sales come in strong on Thursday and the S&P futures breakout to the upside, gold may follow suit with a weakening Dollar due to their positive correlation.  The near-term key to gold’s uptrend will be getting past our 2^nd tier downtrend line.  If this happens, near-term gains could accelerate.

Fundamentally we find resistances of $963.45/oz, $965.98/oz, $968.77/oz, and $972.32/oz with fresh top-end of $976.74/oz.  To the downside, we see supports of $960.47/oz, $957.11/oz, $954.32/oz, $951.79/oz, and $948.13/oz. Gold is currently trading at $961.35/oz.

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