Gold glittered on Tuesday as prices rose to their highest levels this year -- futures [US@GC.1 1006.9 12.00 (+1.21%) ] briefly hit $1,000 while spot prices rose to six-month highs. Will the precious metal continue to shine at this level?
First of all, one needs to understand the behavior of gold prices. Gold attracts more emotional and political attention than any other commodity. Its relationship with portable wealth, money and Government adds a unique character to its behavior.
The well-established resistance level at $1,000 is a psychological resistance barrier and is not related to the supply of gold or the demand for gold. The movement is created by political features that have an impact on currency movements and the U.S. dollar.
The resistance level near $1,000 is created by the high in 2008 and the high in February 2009. This is a powerful resistance level and creates a double top pattern. While the price has moved a little distance above this level, it has not been able to remain above this level.
