Demand for Higher Risk Commodities Drives Gold Higher

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Today’s sample of Futures ####ysis from FuturesHound.com

April Gold surged for the third consecutive day fueled by a combination of oversold conditions and a weaker Dollar. After failing to attract fresh selling pressure following the break under the December bottom at $1076.50, this market has formed a support base. Tuesday’s rally helped form a new main bottom at $1073.20. Based on the short-term range of $1166.70 to $1074.40, traders should look for a retracement to $1120.50 to $1131.40. Watch for a technical bounce following a test of this zone.

U.S. equity markets failed to attract selling pressure early in the session, triggering a buying spree. Increased demand for higher risk assets helped lead the charge along with good earnings reports and a better than expected U.S. Pending Home Sales Report. .

The March E-mini S&P 500 held an early test of a 50% price at 1084.50. The failure to break this market when it tested 1082.00 led to an initial short-covering rally which encouraged fresh buying throughout the day session. The charts indicate a rally to 1109.25 is likely over the near-term.

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