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Moment of Truth for Gold: Ilczyszyn

Gold consolidated towards the upper end of its range yesterday, after bouncing off of a trend line that starts with the Jan. 5 low.

With the current price action against $1,680, gold is now bracing against a resistance trend line from the late November highs.


% Chg in 2011: 10% Closing Price: $1,564 / ounce 52-Week High: $1923.7 52-Week Low: $1307.7 Related ETF: GLD, +8%
% Chg in 2011: 10% Closing Price: $1,564 / ounce 52-Week High: $1923.7 52-Week Low: $1307.7 Related ETF: GLD, +8%

Lower price action has been fought with a strong bid over the last two days of trade. Even yesterday's strong dollar and weaker euro did not prevent gold from finishing slightly positive on the day.

This is rare, but as we head into a the European Central Bank meeting Thursday and deal with a slightly higher U.S. unemployment number, the safe-haven appeal of gold has become slightly brighter.

At this point, close above $1,685, and furthermore $1,700, would be very bullish.

We have seen higher lows for two consecutive sessions, and a move below yesterday's low at the $1,660 to $1,658.20 pocket will be negative, but only a close below $1,653.20, and furthermore $1,644.50, would be very bearish.

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