Sep
4
2010
4
2010
Gold Battles $1250/oz
Gold is continuing to battle its psychological $1250/oz level after the precious metal took a bit of a hit on Friday as the risk trade rallied across the board. Stronger than expected U.S. employment data sent investors back into risk, denting gold due to its status as a safe-haven asset. However, the precious metal held up relatively well despite risk flows due to inflationary signals in soft commodities. Wheat and corn barreled higher last week as talks of food shortages reemerged for the first time since the global financial crisis struck. Should agricultural commodities continue to climb toward uncomfortable levels this could benefit gold due to the precious metal’s use as a hedge against inflation. Meanwhile, despite last week’s positive turn in investors sentiment headwinds remain in the global economy and we’ll have to see whether the risk trade can make August lows a lasting bottom. Regardless, gold’s long-term uptrend is clearly intact and the precious metal just another wave of strong buying interest in order to leave behind $1250/oz and top previous 2010 highs.
Technically speaking, gold has technical supports in the form of 9/3 and 8/31 lows. As for the topside, gold faces technical barriers in the form of previous September highs and the psychological $1250/oz level. Additionally, previous 2010 highs could serve as a solid technical barrier should they be reached.
Present Price: $1246.50/ oz
Resistances: $1248.34/oz, $1250.91/oz, $1252.71/oz, $1254.71/oz, $1255.70/oz, $1258.05/oz
Supports: $1246.71/oz, $1244.97/oz, $1241.60/oz, $1240.12/oz, $1238.62/oz, $1237.21/oz
Psychological: $1250/oz, 2010 Highs
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Posted by: Matthew Myers
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