Market outlook : gold (6 Aug 2012)

With the dollar weakening, gold is starting to look interesting. Earlier in the week, while the dollar was trying to move higher, gold retreated. However, the weakness in the greenback on Friday sent gold bouncing right off its 20 day EMA. Technically, gold looks as solid on a daily chart as it has in the past six months. The 20 day EMA has crossed above the 50 day SMA (golden cross) and the daily MACD recently broke above centerline resistance. Gold has price resistance in the 1625-1635 per ounce range. If that level is cleared, gold could very well be off to the races once again. Key support has been holding in the 1525-1550 area. Clearly, the trading range is squeezing, indicating that a bigger, more powerful move is likely on its way.