Gold gets a lift from US dollar weakness

Gold is up $14 today to $1588 and the technical picture is beginning to brighten. The driver today is general dollar weakness.
In what’s perhaps a counter-sentiment indicator both UBS and Deutsche Bank cut 2013 gold price forecasts today. DB lowered its forecast 12% to $1637 while UBS lowered its estimate to $1740 from $1900.

“The forces which have propelled gold returns higher over the past decade, namely a weakening U.S. dollar, falling real interest rates and a rising U.S. equity risk premium have all moved into reverse since the end of last year,” Deutsche Bank said.

The critical factor on the longer-term chart is that $1522 remains unbroken. Given the fall from $1800, there might be scope for a further rebound.

The daily chart is also pointing higher after the break of the 61.8% retracement, something I highlighted on Friday.