Gold $1,200 – A Line in the Sand

Lets try to rationalize that the Dow Jones Industrial Average             ( DJIA             ) made over 50 new “all-time” highs in 2014 and nearly as many in 2013             . As I have said, while learning from my near decade in financial markets, trading (and sometimes investing) defies logic.

Gold             still has been trading rather technically, opposed to what many may say is fundamentally driven. The US dollar index             has remained positive for six consecutive months and at multi-year highs. And, two solid (on the surface) gross domestic prints have hindered gold’s upward progress, but lower support levels have held – so have higher resistance levels. Gold             has remained somewhat consolidated in 2014 with $1,200 being a key focal point. It has been a psychological line in the sand.
Gold             has seen high volume while trading to $1,200 per toz. When the yellow metal saw support at $1,200, it has been able to rally to higher resistance levels. Conversely, the inability to garner sufficient support has cause gold             to trade lower, particular to support in the mid-$1,170s and low-$1,180s.

On the daily chart , gold             has broken lower through the ascending channel and began to form a descending channel , which is generally bearish . Gold             could push lower, but the new channel has key support levels within its decent. The former ascending and current descending channel (interestingly) intersect at $1,204.50 – price where gold             opened up in 2014. This will remain a key level to watch.

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