The dollar is weakening, again, on bad data with durable goods declining 1.4 percent in February versus expectations of a .4 percent gain. Core durable goods month-over-month, ex-transportation, fell .4 percent while January’s figure was revised down from zero to a contraction of .7 percent. The ongoing poor data out of the US is giving traders reason to doubt the Federal Reserve’s ability to raise the key benchmark rate anytime this year, thus rekindling gold bulls.
In “Gold to Retest $1,130 Lows,” gold was trending lower on a much stronger dollar. Support at $1,140/24 was the last line of defense before challenging the November low of $1,130 per toz. If the dollar had maintained its strength, it was a real possibility; but, the Fed rained on the bears’ parade.
Currently, gold is climbing to $1,200, which will initially act as round number resistance. The 4H chart is showing that the price action from the breakout is floating in overbought territory with an of 70. Considering that the is coinciding with price action resistance, gold could pullback slightly while maintaining momentum.
There is nice activity with a 50/72 convergence and price action sitting on top of the 200-4H .
Potential pullback targets are seen at support levels at $1,186 and $1,174 per toz. However, a close about $1,200 could send prices to $1,209 and $1,222 per toz.
Then again, we're seeing the euro clean out some shorts. Dollar up 20+% in less than a year. As my other pieces stated, that doesn't end well. I prefer to buy my insurance before the car wreck not after ;) Spot price is simply the monthly premiums paid.