Paul Ebeling on Gold: Gold’s up-trend intact and looks for a new high

Gold is higher in the European session today, catching up with Euro’s strength yesterday.

Currently trading at 1251 oz, the up-trend for the precious Yellow metal remains intact, and as long as uncertainty in macro-economic outlook persists, Gold has a chance to rise to a new record high in here.

On Wednesday Gold futures on the COMEX Division of the New York Merc pulled back from its new 2-month high and ended a bit lower Wednesday, as a series of stronger-than-expected economic data improved investors’ overall macro-economic outlook and softened the metal’s allure as a safe- haven, Silver edged lower, and Platinum closed up.
The most active Gold on the COMEX contract for December delivery lost US$2.2 or 0.2%, to finish at 1,248.1 oz. on Wednesday.

Gold rose earlier Wednesday and touched 1,256.6 oz, the highest intra-day price since June 28, after a report released by ADP Employer Service showed the private-sector jobs in the US unexpectedly dropped by 10,000 in August, and US construction spending in July plunged to its lowest rate in 10 yrs, according to US Commerce Department.

But then a string of upbeat economic data halted Gold’ s morning rally. A stronger-than-expected ISM reading, combined with strong manufacturing data from China, and a better-than-expected economic growth in Australia have triggered the evaporation of bearish sentiment in the market, and in turn dulled the safe-haven shine of the precious Yellow metal. Plus the sharp rally in the US equity markets also helped to hasten the decline in Gold, as players sold off Gold to take profits and speculated in stocks.

Dec Silver dipped 3.9c, or 0.2%, to 19.393 oz. and Oct Platinum rose US$12.2, or 0.8%, to 1,535.7 oz.

The Overall Technical Outlook

Comex Gold (GC)
Gold lost upside momentum on Wednesday after hitting at high at 1256.6. But another rise could be seen as long as 1233.6, the minor support holds, I am looking for Gold not to move to and test 1266.5, a Key resistance level.

On the Downside: a break of 1223.6, a Key support level, will be the 1st alert that the rebound from 1155.6 is finished and will flip bias back to the Southside for a move to the 1211.7 support level and below.

The Big Picture: Gold is regaining its momentum in here and this development now dampens my Bearish POV. The rise from 1155.6 may actually be resuming in the larger up-trend. So, I am now Neutral in front of the 1266.5 resistance level. A break of 1223.6 support will revive my POV that Gold has topped out at 1266.5 and will bring another fall to below 1155.6. Again, decisive break of 1266.5 will indicate that the medium term rally is still in progress as Gold moves to 1300, the Key psychological level. Stay tuned…

Posted by Shayne Heffernan on Sep 2nd, 2010and filed underEquities, Europe, Markets.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site