Gold Bottoms Out On Weak Volume

Gold is fighting back from Monday lows, which almost saw a retest of the psychological $900/oz level.  However, volume to the upside has been weak, indicating bulls don’t feel too confident about the near-term future of the precious metal.  We view yesterday’s pullback as a significant movement since it occurred at the collision point of two important uptrend lines.  Therefore, it seems a retest of $900/oz is imminent.  Investors should keep an eye on U.S. equities.

Gold may take its cue from the behavior of the S&P futures since the precious metal is heading towards a highly psychological zone.  If the S&P futures can’t hold onto their own psychological 900 level, then gold may find the momentum to head south of $900/oz due to their positive correlation.

Encouragingly, the Dollar is depreciating across the board right now, which is normally positive for gold.  We maintain our negative near-term outlook on gold due to the aforementioned analysis.

Present Price: $922.40/oz

Resistances: $923.96/oz, $927.40/oz, $931.41/oz, $935.62/oz, $939.82/oz

Supports: $920.95/oz, $917.49/oz, $914.99/oz, $911.14/oz, $908.25/oz

Psychological: $950/oz, $900/oz

Subscribe by RSS Subscribe by Email