The U.S. dollar fell to a near one-year low against a basket of major currencies, continuing its steep drop from yesterday, as higher equities around the world bolstered risk appetite. In the short -term, the U.S. dollar direction will likely affect the overall direction of the gold trade. As more concerns are expressed about the future of the dollars dominance. The further north we can expect gold to go, at least in the short-term.
-PowerTrader
Closes In On Key Resistance Levels
GOLD: Recovery triggered off the 681.43 level, its Oct 19’09 low remains alive as Gold continues to break high keeping upside pressure on its Feb 15’09 high at 1,005.98. While the commodity maintains above its medium term rising trendline drawn off the 681.43 level, further upside with an eventual violation of the 1,005’98 level is likely. This view is consistent with its medium to longer term uptrend which is now on hold. Penetrating and negating the mentioned resistance zone will pave the way for a run at the 1,032.60 level, its all time high seen in 2008 with a close above there triggering its long term trend resumption and putting Gold on the path to further upside gains towards the 1,050 level and the 1,100 level. This view is supported by its weekly RSI which is now trending higher.Although this view is being tempered with some form of hesitation on the daily time frame, its overall outlook continues to point higher. On the other hand, if corrective pullbacks are triggered, we could see declines aiming at the 971.60 level, its Aug 08’09 high at first with a break below there pushing it lower towards its MT rising trendline currently at 948.88 where a cap is expected. On the whole, having continued to strengthen, Gold now has its focus on its longer term uptrend resumption.
Written by Mohammed Isah
