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GOLD: Weakens, Targets Further Downside

The commodity remains weak and vulnerable to the downside weakening for a third day in a row and targeting further declines. Its present weakness is coming on the back of a loss of upside momentum at the 1,576.20 level, its 2011 high. This development has put its long term rally on hold and opened up further downside risk towards the 1,500.00 level, its psycho level. However, a convincing violation of the 1,517.85 level, its April 25'2011 high will have to occur for the former level to be targeted. Further support comes in at the 1,493.10 level, its April 26'2011 low. We expect a combination of those levels to provide a strong support and turn the commodity higher again. Alternatively, the risk to the commodity's present weakness will be a return above the 1,576.20 level, its 2011 high. This will set the stage for a push higher towards its psycho level at 1,600 and then the 1,650.00 level.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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