Gold Rallies as Gold Prices break above 1765 Resistance Level

New York spot gold hit $1782.48 Thursday morning, up $6.60, hovering near a three-month high. This portends well that the precious metal is about to break through the $1,783 resistance level and attempt to breach the $1,800 wall.

Clearly, investors are seeking to moor investment dollars in safe-haven gold. Technical momentum gains by bulls this week also helped to push the gold prices higher.

Ongoing tension in the Middle-East between Israel, Iran and the U.S. also grew a fresh pair of legs under gold to send it galloping past the $1,765 resistance level. Traders believe that the gold price has more upside movement built in, which will be pushed by technical momentum.

Iran flexed its oil muscles and stopped shipping oil to some EU countries. This move is seen as a reaction to a proposed EU ban on Iranian oil imports. In addition, some media outlets are sounding war trumpets about potential military action against Iran by Israel or the U.S. All these ingredients contribute to a volatile bullish recipe that will maintain gold’s reputation as a solid safe-haven.

Meanwhile, crude oil futures prices inched up a tad higher after surging to a nearly 10 month high this week. This rally in oil is another major bullish factor for the price of gold.

Another positive sign for the precious metal is a lower U.S. dollar index. The index is fluctuating and has no clear trend.

Crude prices combined with a meandering dollar index are indicators that will have some positive effect on gold metal prices.

The next wall for gold to breach will be the $1,800 mark. The price of gold, as mentioned above, appears poised to break through the first resistance level of $1,783.

Meanwhile, the Greek fiasco continues to play out and affect gold markets.

A new EU rescue package for Greece calls for a $173 billion debt deal. This pushed European and U.S. equity markets higher but sent the U.S. dollar lower. That was bullish news for gold as it broke free of the uncertainty over the Greek situation.

The Greek deal relieved some anxiety for investors, but they realized that the Greek deal carries considerable risk. There is real concern that this latest EU deal is a band-aid, and not a fix.

Nobody is betting the house on how gold buyers will react to the Greek fiasco over the long term. In the short term, though, gold prices are catching a second wind and moving higher.

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