Gold rallied strongly yesterday, shooting towards 4/27 highs while exhibiting an odd positive correlation with U.S. equities.  The precious metal continues to be a puzzling read as it abruptly alters its correlative patterns.  However, we don’t view gold’s gains as critical since volume has been normal while 4/27 and April highs remain intact.  Should the S&P fly past 900 in the near to mid-term, we would expect the negative correlation between equities and gold to play out. 

Therefore, due to the relative strength of the S&P futures, we maintain our bullish outlook on gold unless the precious metal should climb past 4/27 highs on strong volume.  Then the next stop would likely be our 3rd tier downtrend line.         

Gold continues to bounce around the critical $900/oz level.  Could it be that investors aren’t quite sold yet on an economic recovery, and are covering their bases until Thursday’s stress test?  Another reason behind gold’s relative strength could be a sign that China is adding more gold to its reserves in an effort to diversify from the Dollar.  However, these explanations are merely speculation until we receive some definitive evidence.  
Fundamentally we find supports of $911.85/oz, $910.11/oz, $908.81/oz, $906.85/oz, and $905.11/oz.  To the topside, we see resistances of $914.45/oz, $915.97/oz, $917.71/oz, $920.10/oz, and $922.49/oz. Gold is currently trading at $912.45/oz.

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