Gold prices were higher in the Asian morning session trading well above the $1186 support level which is being seen as a huge positive. The rally in gold prices was on the back of safe haven buying on the back of comments from Germany about the fact that the Eurozone can survive if Greece decided to exit the Eurozone. The comments are back on the news that the principal opposition party in the Greek election, which is also the front-runner in forming the next government said that it would want a write off in Greek debt which is being seen as a huge negative as it might lead to credit defaults. Also, many traders believe that there is some amount of physical demand emerging at lower levels from countries like China which is being seen as a huge positive.
Traders in the coming week would be closely watching the release of the FOMC minutes on Wednesday which would provide an insight into the stance to be undertaken by the Federal Reserve with regards to short term interest rates in the near term. Traders would also be closely watching the release of the non farm payroll report to be released on Friday which would provide an insight into the growth trajectory of the labour markets in the United States.
When looking at the daily charts for gold, the precious metal has been trading in a very narrow trading range which is a cause for concern for traders ad investors. The resistance for gold continues to be near the $1207 level on the upside. The momentum indicators for gold are showing first signs of a bullish reversal which is a huge positive. The relative strength index has given a buy signal which is a huge positive and is indicative of the shift of momentum towards the buy side.