The rally in gold cooled yesterday as the precious metal failed to test the highly psychological $900/oz mark. Gold is calmly walking along today despite a downturn in the S&P futures after a negative earnings release from Morgan Stanley.

The recent performance of gold has been erratic at best, and it's difficult to gauge what the precious metal has on its mind. While seemingly committing to the downtrend at the beginning of April, gold has since re-approached $900/oz twice.

However, the precious metal hasn't risen above the key level, and the downtrend is still in the driver's seat as far as we're concerned. On the other hand, if U. S. equities were to take a turn for the worst, investors may instinctively run towards gold as a safe-haven during uncertain times.

Although, we can't forget gold declined with equities during the height of the economic crisis, sending a message of deflation. Therefore, if CPI and PPI were to fall dramatically, gold could follow equities to the downside. Fundamentally we find resistances of $887.21/oz, $890.64/oz, $894.37/oz, $897.24/oz, and $900.41/oz.

To the downside, we see supports of $884.54/oz, $880.71/oz, $877.70/oz, $875.17/oz, and $872.40/oz. Gold is currently trading at $885.70/oz.

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