Gold is bouncing between our 2nd and 3rd tier downtrend lines as the Dollar appreciates across the board. Investors are reacting to the BOE’s decision to administer a monetary shock by injecting another $84 billion into its QE package. The GBP/USD is under considerable pressure, hampering any excitement over lower than expected weekly Unemployment Claims.

Meanwhile, the S&P futures continue to battle with their highly psychological 1000 level. It appears bulls may be running low on energy, implying consolidation in gold is the result of overbought conditions. We wouldn’t be surprised to see the precious metal continue its consolidation as the S&P deals with 1000. The bulls have been on a huge run lately, so it’s only healthy that the markets experience some profit taking and consolidation. Regardless, momentum is clearly in favor of the uptrend since economic data continues to outperform while 2nd quarter earnings season has exceeded expectations.

Meanwhile, gold is trading back above August 3rd highs with the psychological $950/oz level far out of reach. However, if the precious metal can’t hold our 2nd tier downtrend line, it may defect towards our 1st tier downtrend line and our bottom-end support. As for the topside, gold’s immediate barriers are our 3rd tier downtrend line and Tuesday’s highs. If the precious metal can get above these two obstacles, gold could accelerate towards $980/oz.

Present Price: $966.90/oz

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