After yesterdays rally in the US dollar, Gold has again slipped back ahead of the key $1,000 resistance level, after making a high of $990.
It would appear that the market is still a little reluctant to get overly long of the yellow metal, given the reaction on the last two occasions that the market traded near the $1,000 mark, and the rapid profit-taking that took place soon after.
The prospect of sovereign debt crises in the UK and the US has undoubtedly buoyed the Gold price over the course of the past two months.
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The bullish gold scenario remains in the short term while the support around $900 remains intact, as well as the support at the 200 day moving average around $870. There is a possibility of a pullback to these support levels. This is because both the AMEX Gold Bugs and the PHLX Gold/Silver indices appear to be exhibiting significant divergence on their highs for this year. This suggests that we may see a correction back lower, which in turn could drag the gold price lower as well.
