Gold Tops $1,200/oz
Posted 08-06-2010 at 06:41 PM by fastbrokers
Gold Tops $1,200/oz
Gold has topped its highly psychological $1200/oz level again and the precious metal has clearly re-entered the realms of its medium-term uptrend. Investors are fleeing to the precious metal again as investors lose confidence in the Dollar amid discouraging economic data. Today’s non-farm payrolls data disappointed just like yesterday’s weekly unemployment claims figure. Hence, the U.S. employment market is not improving as quickly as required in order to sustain a healthy economic recovery.
Persistent unemployment is leading investors to believe that the Fed will need to find more alternative ways to loosen liquidity, and some analysts even speculate the central bank will take action next week. Regardless of whether the concept of new dovish monetary policy action is purely speculation at the moment, the idea of looser liquidity is having a lasting negative impact on the Dollar and gold is beginning to benefit has a hedge and safe-haven. Additionally, gold is still benefitting from a decision by the Chinese government to loosen trade restrictions on the precious metal. Investors are speculating that the new policy will boost demand for gold, although it will take a good amount of time to determine whether recent action by China has a positive or negative effect on consumption.
In the meantime, gold has hopped back above our medium-term uptrend lines along with its highly psychological $1200/oz level, telling us that the precious metal’s uptrend is very much back in play.
Technically speaking, gold has technical supports in the form of intraday and 8/5 lows. Additionally, the highly psychological $1200/oz level becomes a solid technical cushion. As for the topside, gold faces technical barriers in the form of intraday and 7/13 highs.
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Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. All materials are property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized reproduction is prohibited
Gold has topped its highly psychological $1200/oz level again and the precious metal has clearly re-entered the realms of its medium-term uptrend. Investors are fleeing to the precious metal again as investors lose confidence in the Dollar amid discouraging economic data. Today’s non-farm payrolls data disappointed just like yesterday’s weekly unemployment claims figure. Hence, the U.S. employment market is not improving as quickly as required in order to sustain a healthy economic recovery.
Persistent unemployment is leading investors to believe that the Fed will need to find more alternative ways to loosen liquidity, and some analysts even speculate the central bank will take action next week. Regardless of whether the concept of new dovish monetary policy action is purely speculation at the moment, the idea of looser liquidity is having a lasting negative impact on the Dollar and gold is beginning to benefit has a hedge and safe-haven. Additionally, gold is still benefitting from a decision by the Chinese government to loosen trade restrictions on the precious metal. Investors are speculating that the new policy will boost demand for gold, although it will take a good amount of time to determine whether recent action by China has a positive or negative effect on consumption.
In the meantime, gold has hopped back above our medium-term uptrend lines along with its highly psychological $1200/oz level, telling us that the precious metal’s uptrend is very much back in play.
Technically speaking, gold has technical supports in the form of intraday and 8/5 lows. Additionally, the highly psychological $1200/oz level becomes a solid technical cushion. As for the topside, gold faces technical barriers in the form of intraday and 7/13 highs.
Aug6Gold.png
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. All materials are property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized reproduction is prohibited
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