GOLD: Corrective Strength To Target The 1,125 Level

GOLD (Futures): A breather was seen the past week following the commodity’s resumption of its declines activated at the 1,226 level, its 2009 high. That strength saw Gold break back into its earlier broken longer rising term trendline and its Jan 28’10 low at 1,073.95 to close the week higher at 1,093.30. Though still retaining its broader downside bias, immediate risk remains higher for further strength towards its Feb 03’10 high at 1,125.00 where a cap is expected to turn the commodity back down again. However, if that level gives in we may see more momentum build up towards its Jan 20’10 high at 1,141.48. On the downside, the 1,093.95/30 levels, representing its Jan 28’10 low/trendline support will come in as the initial support with cut through there targeting its 2010 low at 1,044.20. A clean break below there will resume its short term downtrend towards the 1,030.85/1,026.55 levels, its Mar’08 high/Oct 28’09 low and then the 986.67 level, its Oct’09 low.