GOLD (Futures): Although gold futures closed marginally lower this week, the corrective recovery triggered off the 2010 low at 1,044.20 should lift the commodity higher, with the next upside target at the Jan. 20 high at 1,141.48.

The ability of the commodity to reverse most of its losses after declining to a low of 1,088.20 on Thursday remains supportive of this view. Additionally, with gold now holding above its long-term rising trend line, further upside strength remains supportive of its long-term uptrend. A decisive violation of the 1,141.48 level will create scope for further gains toward the 1,161.88 level, the Feb. 11 high, followed by the psychological level at 1,200 and then the 2009 high at 1.226.33. The weekly stochastics have turned higher, supporting this view. On the other hand, weakness, if seen, will target the 1,088.20 level, the Feb. 25 low, with a cut through there turning attention to the long-term rising trend line support at 1,062.83.

We would expect a cap at the latter level to turn the commodity back up again. However, if that level gives in, lower prices will develop toward the 2010 low at 1,044.20. Overall, having halted its weakness off the 1,226.33 level and reversed strongly higher, risk continues to point higher toward the 1,141.48 and 1,161.88 levels.

Mohammed Isah
Market Analyst
www.fxtechstrategy.com

This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report