Gold: Bullish Second Quarter Outlook
GOLD (Futures): The commodity opened the second quarter higher following a recovery higher from its 2010 low at 1,044.20.
Though presently trading below the 1,226 level, its December 2009 high, it continues to retain its longer-term uptrend, suggesting that its current price action is corrective of that trend.
In order for gold to trigger its broader long-term uptrend now on hold, we expect the commodity to push through three key resistance levels in second quarter.
The immediate one stands at the 1,144.88 level, its March 1, 2010 high followed by the 1,161.88 level, its Feb. 11, 2010 high, and ultimately its 2009 high at 1,226.33.
Above the latter will turn the focus to the 1,250 level, its psycho level or even higher. Note that its big resistance at the 1,226.33 level may force the commodity lower on initial test.
Conversely, our second-quarter support starts at the 1.101.58 level, its March 28, 2010 low ahead of its February 2010 low at 1,085.03 and next to the 1,044.20 level, representing 2010 low.
On the whole, we retain a bullish bias on gold in second quarter with our major resistance standing at the 1,226.33 level.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.