Gold is ripping higher this morning amid heightened fears of global deflationary pressures and a slew of central-bank rate cuts (Norway, Taiwan, etc.):
This morning’s move higher is highly significant because price decisively broke above last week’s resistance level ($1141) and buyers have not showed any signs of lack of conviction. The next major area of resistance comes in around $1170 (8/24 panic high).
Last week we highlighted the constructive futures positioning and posited that reversion to the mean in gold futures positioning would lead to a rally up to at least the $1180-$1200 area over the coming weeks. This appears to be playing out now. Support near $1117-$1120 held perfectly over the last couple of days and it certainly looks like the next leg of the rally which began in early August is underway.
Via Energy and Gold.com