Euro Gold right at Resistance level

Take a look at the following chart of gold priced in Euros, or “Euro-Gold” as I prefer to term it. I have mentioned here and on some of my KWN Weekly Metals Wrap that this chart is one that all gold traders must continue to reference if they are to get a proper handle on the technical aspects of this market. The reason for this is that the issue most shaking the gold market during the “risk off” trades was the mess in the sovereign debt situation of many countries in the Euro-Zone.

Fears over that factor were seeing European-based buying of gold as doubts over the integrity of the Euro surfaced and still are haunting the minds of many traders and investors from that region. After all, put yourself in their place – when you see nations such as Greece, Italy, Spain and Portugal (that is today’s concern) having to pay record or near record yields on their government issued debt to attract sufficient buying to absorb it; when you see France along with some other nations there downgraded, would you not want to follow prudence and at least move a portion of your Euro-denominated assets into gold for protection? I know I sure would.

Either way, that process has kept Euro gold very well bid, even when we were seeing some decent selling showing up on the Dollar priced gold chart.

As long as this chart stays strong, and it is currently very strong with price threatening to take out the resistance level noted and make a run at the former all time high, any dips in Dollar priced gold are not going to last long.

 

Author: Trader Dan, specialized in commodites (including gold & silver)

 

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