Gold has popped back above $950/oz to our 1st tier downtrend line as the precious metal builds a new psychological base. However, we do notice some rising action to the downside for a couple hours yesterday, so investors should monitor volume over the next couple sessions to see where interest lies.

While gold is tempted to pop higher towards June 10th highs and our 3rd tier downtrend line, investors are standing on the sideline as they monitor the S&P’s interaction with its own psychological 950 level. Gold and U. S. equities are positively correlated, so any immediate-term breakout past 950 and 2009 highs in the S&P’s could result in sizable gains in the precious metal.

Near-term momentum is in favor of the uptrend even though the market as a whole is has experienced some hesitation from investors over the past 24 hours. We notice similar consolidation in both the EUR/USD and GBP/USD. Therefore, today’s session could be important in determining whether gold takes the next step to the upside, or opts for near-term downward consolidation. Gold has our 1st and 2nd tier uptrend and 1st tier downtrend lines to fall back on along with July 20 lows.

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