Gold Clears Crucial Resistance as Treasury Intervention Fails to Last

Gold has finally cleared a crucial resistance level of $4,380 an ounce, according to John Roque, technical strategist at 22V Research. This level had previously capped every rally this year for gold.

The confirmation is not yet complete, as gold futures traded above $4,500 Thursday and the 200-day moving average for the first time since early June. Roque said 'Gold is above former resistance at 4380, and it is a buy on any / all pullbacks. A reasonable first upside objective is 4800.'

The reason gold cleared $4,380 this week was due to an announcement by the Treasury Department that it would double the size of its buyback operations in bonds maturing between 10 and 30 years.

However, the market reaction was short-lived, as the Treasury yield quickly returned to its pre-announcement level. The Fed's July jobs report also showed a decrease in consumer inflation, which reduced the likelihood of a September rate hike.