Gold is testing its highly psychological $1250/oz mark while staring down previous 2010 highs as the precious metal continues its ascent higher despite yesterday’s rally in the risk trade. Gold did take a small step back yesterday as U.S. equities soared and investors found more interest in risk. However, intraday losses were negligible and the precious metal’s long-term uptrend is clearly intact with investor uncertainty still at a heightened level. That being said, gold could have enough topside momentum to leave behind $1250/oz over the near-term with key news and data on the way. The ECB will make its monthly monetary policy decision shortly followed by U.S. pending home sales. The U.S. will highlight the trading week with its highly anticipated headline employment data. The ECB will likely stay loose and reiterate a dovish monetary policy for the foreseeable future as the central bank combats headwinds from the U.S. and the potential negative economic impact from the implementation of various EU austerity measures. Loose monetary policy in developed nations tends to bode well for gold and should help boost the precious metal over the medium-term. However, since a loose ECB policy stance is expected more emphasis will likely be places on Friday’s employment data. Should U.S. companies lay off more workers than anticipated then investors would likely snap up more gold in risk-aversion. Either way, gold and the markets as a whole should be in for an active close to the week.

Technically speaking, gold has technical supports in the form of intraday and 9/1 lows. As for the topside, gold faces technical barriers in the form of intraday and 9/1 highs. Additionally, the psychological $1250/oz level could continues to serve as a solid technical barrier over the near-term.

Present Price: $1246.65/ oz
Resistances: $1248.34/oz, $1250.91/oz, $1252.71/oz, $1254.71/oz, $1255.70/oz, $1258.05/oz
Supports: $1246.71/oz, $1244.97/oz, $1241.60/oz, $1240.12/oz, $1238.62/oz, $1237.21/oz
Psychological: $1250/oz, 2010 Highs

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