Gold has carried it's upwards momentum into Thursday's trading session despite the S&P futures trading higher pre-market. Therefore, we could see a pop towards our 1st tier downtrend line as investors take advantage of oversold conditions.

Of course, the path of gold will ultimately depend on its negative correlation with equities. If the U. S. economic releases come in better than expected today, we could see a rapid reversal into the precious metal's debilitating downtrend.

The downtrend is clearly still in play with the uptrend's backbone broken and the highly psychological $900/oz relaxing in the distance. The near-term uphill battle will be yesterday's highs, or our previous $890.64/oz resistance.

We have yet to see if gold's recent commitment to the downside indicates a breakout in the S&P futures. On the other hand, gold's rapid decline could be a sign of deflation as we witnessed during the height of the financial crisis.

This would imply an odd positive correlation between the precious metal and U. S. equities. Only time will tell, and the correlative relationship will be made clear once equities decide whether to commit to the uptrend or fall back into their devastating downtrend.

Fundamentally we maintain our resistances of $884.10/oz, $887.21/oz, $890.64/oz, $894.46/oz, and $897.82/oz. To the downside, we hold our supports of $881.57, $877.02/oz, $873.74/oz, $870.47/oz, and $866.11. Gold is currently trading at $883.80/oz.

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