Review:

Yesterday the gold opened at 663.4, day high at 664.2 day low at 655 and closed at 656.6, the drop was caused by the unexpected market data of US exisitng home sales and weaken of EUR.

Technical:

Daily Chart

The up trend has slight broken however, it is still stay on the slope. After the 7th straight day increased gold seems have some profit taking. The resistance would be 666 and support is on 655.

Market Analysis:

Crude Oil

Crude oil rose to the highest in three months on concern Iran's capture of 15 British naval personnel will heighten tensions in the Middle East, source of a third of the world's oil. The captured marines are members of a combined U.S - U.K taskforce partolling Iraq's territorial waters in the Gulf and protecting its oil terminals. Iran has 60 days to ends its uranium enrichment or its arm exports will be blocked, and the overseas assets of 28 more officials and institutions will be frozen (reference by blommberg.) Oil usually move in line with gold.

Gold

Gold declines last friday in the US trade market as increased in U.S home sales boost dollar. Gold fell for the first time in seven straight days after existing home sales data released unexpected jump. It boosted dollar and eroding the appeal of the precious metal as an alternative investment. Gold generally moves in the opposite direction of USD. The dollar climbed against the euro and pared losses against the YEN after the existing home sales data released. Gold may rebound on speculation that the strength of dollar won't last and the housing data won't effect the Fed's stance to abandon its bias toward raising interest rate. Gold is now refocusing on its own fundermentals. Investors should treat profit taking as a buying opportunity.

Strategy:

Long Position: 658, 660 Stop Loss: 656, 657
Short Position: 663, 666Stop Loss: 665, 668