TGDR TA Gold Chart - Support Levels

Gold came tumbling down hard last night upon the disturbing news from Dubai that it can't meet its debt obligations any longer. Sure enough the dollar caught a serious safe haven bid (although it isn't a safe haven by all means) and gold sold off in a knee jerk reaction. The fact that gold found itself in severe overbought territories wasn't a big help for gold which made the downturn an exaggerated one. Gold initially fell to its 38.2% FIB retracement level where it bounced back strongly. How long (and how deep) this correction will last is too early to tell but nothing changes the big picture which is a detoriating financial scene and a flight into real money which is of course gold.

The chart below show current support levels at $1133, $1113 and a very strong support area in the $1070 - $1090 range. $1070 marks the previous temporary high which was defended heavily by the commercial short traders. This previous high serves as a strong support level now, also supported by the upgoing 50 dma.