Gold Consolidates While The S&P Flirts With 900

Gold is consolidating just above our 2^nd and 3^rd uptrend lines while encouragingly experiencing a little volume to the upside yesterday.  The positive volume is encouraging since we’ve seen more interest to the downside lately.  The present consolidation of gold reflects the S&P’s hesitation at its highly psychological 900 level.  Since gold is positively correlation with U.S. equities now, a fundamental breakdown in one could coincide with or be followed by a similar pullback in the other.  Therefore, investors should be watching gold’s 2^nd and 3^rd tier uptrend lines closely.

For if these trend lines down hold, we could witness another near-term pullback towards our 1^st tier downtrend line and the $907/oz area.  The near-term momentum still sides with the downside since a majority of the volume over the past couple weeks has come from the bears.  As for the upside, gold has to deal with our 1^st tier downtrend line and the psychological $950/oz level.  The precious metal still has reliable defenses intact to the downside, protecting the precious metal’s medium-term uptrend line.

Present Price: $938.90/oz

Resistances: $939.82/oz, $941.94/oz, $945.67/oz, $949.34/oz, $953.31/oz

Supports: $935.06/oz, $931.41/oz, $927.40/oz, $923.96/oz, $920.95/oz

Psychological: $950/oz, $900/oz

Subscribe by RSS Subscribe by Email