Gold Breaks Out to New High: Acceleration Next?

Gold broke out Monday to a new record high, after leaders of the Asia Pacific Economic Cooperation (APEC) forum pledged to maintain stimulus until the global recovery is in firm footing.

From Bloomberg:

"Stock markets rose around the world and the dollar began a third week of declines after Asian leaders pledged to maintain measures to stimulate economic growth. Commodities gained as gold jumped to a record... Copper for delivery in three months advanced $165 to $6,685 a metric ton on the London Metal Exchange, $47 away from its high for the year. Aluminum, nickel and zinc also gained. Gold for immediate delivery rose 1.1% to $1,130.92 an ounce, after earlier reaching an all-time high of $1,133.20. Crude oil added 1.4% to $77.45 a barrel in New York." (Click chart to enlarge)

Looking at the technicals, Gold has broken out of its channel trading range, and if gains are sustainable in the next few trading sessions we could see a price acceleration toward the $1,180 per ounce level at the minimum ($60 range of price channel added to channel high of about $1,120). Gold has benefited either way, be it inflation (due to continued stimulus and money-printing) or deflation (double dip in economies), and it looks like this accelaration scenario is very well possible.

A failure to hold above $1,120 per ounce however would classify this as an exhaustion move, and we may very well see gold correct to the $1,080-$1090 per ounce range as funds liquidate.