Gold has held onto these gains and is currently trading at 1411, looking poised to challenge the next resistance levels at 1415 and 1425. Whilst a move up to these levels appears likely, we do not see gold moving much higher than this in the short term.
The yellow metal has enjoyed a strong run recently and the 1415-1425 area offers very stiff resistance - we therefore expect a period of consolidation and a retracement once this area is reached. However, we are approaching a favourable part of the year for gold seasonally so further gains are likely as we move towards the end of the year, with 1488-1525 the ultimate target for this rally.
Equities and the dollar remain weak and this has helped gold to move higher, as has the escalating crisis in Syria, with the US and the UK stepping up the diplomatic pressure and Russia moving in retaliation to protect its interest in Syria. Oil also remains at an elevated level around $106 a barrel.
It is interesting to see silver lead the move higher in precious metals - this indicates to us that the move could be the start of a new bull run and contrasts with the previous attempted rallies where silver lagged behind gold.
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