Spot Gold prices have consolidated, after a gradual climb during the Asian session saw prices hit a five week high at $1667.90. Gold prices began to correct back shortly before the European equity cash opening, but prices formed a base around $1658.85. Better than expected Chinese trade data in Asia overnight has been the main catalyst for the squeeze higher, with gold prices mainly moving in tandem with the recovery of the EUR/USD FX pair and an overall renewed appetite for risk assets. The EUR has also seen some recovery thanks to a better than expected ZEW business survey coming out of Germany this morning, with EUR/USD climbing to an intra-day high of $1.2801 amid reported longs looking to bail out around $1.2800. Spot gold is now seen heading back towards its trend line, drawn from the all-time high of $1921.15 seen on 6 Sep, 2011, with today’s upper level marked at $1678 with the level descending as each day passes. A break above this trend line would constitute a breakout of a triangle formation, and pave the way for prices to test the 100-day moving average, currently yielding $1697.23.
EasyForexNews Research Team