Spot gold made strong gains last week with the moved spurred by the FOMC meeting with the Fed pledging to keep interest rates very low until 2014, and expectations heightening of another round of QE. The metal rallied strongly on Wednesday through the $1700 level and continued to consolidate into the end of the week, closing around $1738.60 in NY on Friday night. Early Asian trade this morning saw a move up to $1741.00 before risk sentiment waned on weekend comments from German FinMin Schaeuble that Europe may refuse the fresh Greek bailout and push Greece into default, if it doesn’t prove itself over reforms. Greek PM Papademos rejected Germany’s idea of a European “budget commissioner” which led a fall in the euro, despite hopes that Greece would more than likely get a favourable deal with private bondholders on the debt swap this week. The metal has since eased back to $1730 ahead of Europe. Gold has support at $1714.60 and $1703.20 with resistance now seen at $1756.30 and $1763.35.
EasyForexNews Research Team