GOLD: Having lost upside momentum at the 1,475.90 level and tumbled lower on Monday, Gold is now under pressure for a second a day in a row as it is building on those losses in today’s trading session.
However, this price action remains corrective of its overall bullishness as the 1,446.92 level is likely to provide support if tested (tested today), but if it gives in, further declines should shape up towards the 1,409.75 level, its Mar 28’2011 low. We expect a halt in declines at that level to turn the commodity higher. Further down, support lies at the 1,380.85 level, its Mar 15’2011 low. Its daily RSI is bearish and pointing lower supporting this view.
On the upside, to reverse this view, a close above the 1,475.90 level must be established to resume its broader long term uptrend towards the 1,500.00 level, its psycho level. A clean break of that level will pave the way for a run at the 1,550.00 level followed by the 1,600 level, its psycho level.