Gold Holds Support, Ready for Breakout in US$ and Euro Terms

While the financial media pronounced the end of the Commodities bull and the end of the Gold trade, the market didn’t listen. The financial media apparently forgot that there is no solution to the coming global sovereign debt crisis. Perhaps they just thought there wasn’t a crisis?

Speculation aside, sovereign debt concerns are growing in a host of European nations. Fitch announced that a restructuring of Greek debt would basically be considered a default. The IMF said that Ireland’s ability to sell its debt is “elusive” and that the country needs a new plan and more financing from the ECB. Finally, a report suggested that Spain would reveal some debts that had previously been hidden by the authorities.

This news is boosting Gold in both US Dollar and Euro terms.

As you can see, Gold in US Dollar terms has held support at $1475. Only $1525 stands between it and a test of the recent high. Gold in Euro terms has been in a bullish consolidation pattern since last summer. The market is close to a technical breakout which would project 17% higher from current levels.

As Gold corrected the financial media and pundits alike boasted about the end of the Gold trade. Sentiment overreacted on the downside and Gold managed to hold support and strengthen in real terms. That setup along with the likely escalating situation in Europe combined to drive the market higher in what could be the start of a new leg higher. If you are looking for more top notch analysis on Gold and would like to make money in the shares, then consider a free 14-day trial to our service.

Good Luck!

Jordan Roy-Byrne, CMT

Jordan@TheDailyGold.com