GOLD posted modest gains in Asian trade today as the USD declined and equities gained on the back of better unemployment claims data in the US last night but the Eurozone problems remain and bond yields are sure to rise as more negative news flow comes to the forefront in coming weeks. Gold traded in a $1,743-69 range and finished the session stronger by 0.40% at $1,767. Even as equity markets recover some of the selling we saw earlier in the week we have not seen a stable market and retail investors will remain sidelined until we see some certainty return and a break out of the recetn1,200-1,290 range in the SPX 500. Investors are cashed up and they will continue to diversify into gold as problems in the global financial markets remain evident and as US interest rates remain low and stimulus is added. We are very bullish on gold prices at current levels and believe that the pullback we were expecting in the short-term is now complete. We are a buyer of dips towards $1,750 and stops will remain lower down at $1,694 to start just in case we see an extension. Tighter stops can remain at $1,734. We would buy more at $1,777 and again above $1,800.
Expect buyers to return tonight and lower liquidity due to bank holiday could exacerbate any move higher.

Compass Direction

Short-Term     Medium-Term

BULLISH         BULLISH

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