NEW YORK (
) -- Gold: The commodity continues to hold above the 1,329.25 level, its Dec. 16, 2010 low, following a return above that level this past week. As long as this continues to happen, we see a recovery risk being triggered toward the 1,152.95 level, its Jan. 24, 2011 high, with a violation of there pushing the commodity further higher toward the 1,378. 80 level, followed by the 1,392.25 level, its Jan. 13, 2011 high.
We expect a cap at the latter to turn the commodity back lower, but if that fails, a run at the 1.431.28 level and the 1,450.00 level could occur. Alternatively, below the 1,307.60 level will turn our focus to the 1,300.00 level, its big psycho level. We expect this level to provide a strong support and turn the commodity back up on an initial test because of its psychological importance.
However, if it snaps, except gold to decline further toward its long-term rising trend line at 1,288.75. Generally, Gold remains vulnerable to the downside, but continues to look for a meaningful corrective recovery.
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.