Gold Price Getting Closer To USD 1,200

Important levels in the dollar and the VIX are being tested. If these levels are breached, it would be bullish commodities. The dollar might test $1.5070 against the euro. The VIX is testing important support. After yesterday's movements in the VIX, the index looks set to test a trend-line which stretches back to August 2008 (when risk aversion exploded). A break in the VIX below 20.40 - 20.10 could see the index move even lower in coming days. Precious metals should benefit. With US equities set to open higher (according to futures market), I expect good support for precious metals.

Gold continues to set new highs, trading at USD1,180 this morning in Asia. Technically, gold remains overbought. However, buying appetite is not fading. We have seen some scrap metal coming to the market at current levels, but still it is not enough to offset buying.

Gold support is at USD1,170 and USD1,150, resistance at USD1,180 and USD1,200.