GOLD: Targets The 1,517.85 Level And Beyond

The commodity may have started a correction following a cap at the 1,517.85 level on Monday but its subsequent failed weakness on Tuesday has put that on hold. Despite its price hesitation, Gold continues to hold on to its broader long term bullishness suggesting a retarget of higher prices could be developing. The immediate upside risk comes in at the 1,517.85 level, its 2011 high with a break clearing the way for more strength towards the 1,550.00 level followed by the 1,600 level, its psycho levels and then the 1.650 level. Its daily RSI has turned higher supporting this view. Conversely, a return below the 1,493.10 level will call for more declines towards the 1,458.55 level, its April 11'2011. We expect that level to reverse roles as support and turn the commodity back up in the direction of its primary uptrend. Further down, support comes in at 1,443.70 level, its April 12'2011 low.