Gold climbs past 1,095 on Japan's GDP data

Very few fundamentals, other than US ones, are usually able to drive the bullion substantially. However, today an exception was made for Japan, where economy entered a technical recession. Gold is recovering from last week's lows of 1,084 and is trading close to the 1,100 mark at the moment. This important psychological level and monthly S1 should manage to cap a rally in the short term. Our medium term expectation remains fairly bearish and main focus is on July low at 1,070. On the other hand, any gains above 1,100 will therefore intend to retake Nov 5 high at 1,111 next.

Market sentiment with respect to gold remains strongly positive for the moment, being that 72% of SWFX traders are holding long positions, up one percentage point over the weekend.