Gold is popping back up to the all-important $900/oz level in reaction to a worse than expected Prelim GDP number from the U.S.  Investors are opting for risk-averse investments today, though not to the extent one would expect after such a negative data release.  The wild, unpredictable behavior of gold continues with investors uncertain which side of the trade to commit to.  

Despite the high volatility, we do notice a gravitational pull towards $900/oz.  Gold’s behavior is not surprising due to the fact that $900/oz is such a highly psychological level.  A commitment either above or below represents investors taking sides on the issue of a global economic recovery.  A sub-900 performance indicates economic recovery, while 900+ signals more troubling times ahead.  Hence, the erratic behavior of the precious metal reflects the mixed investor sentiment prevalent in the marketplace.

Gold is presently wrestling with our 3rd tier uptrend and downtrend lines.  Ultimately, the precious metal’s performance will likely depend on its negative correlation with U.S. equities.           

Fundamentally we find resistances of $902.85/oz, $905.09/oz, $907.10/oz, $910.46/oz, and $913.15/oz.  To the downside, we see supports of $898.38/oz, $896.36/oz, $893.45/oz, $890.10/oz, and $887.41/oz. Gold is currently trading at $899.50/oz.

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