The crisis of confidence that has driven gold these past few months has begun easing and the precious metal is slowly starting its ascent towards key resistance levels, says Ole Hansen, Head of Commodity Strategy at Saxo Bank. But in order to really shine once more, it needs to break beyond key price levels above USD 1710/oz.

While it is recovering from a major early-January sell off, upward momentum has stalled at around USD 1695/oz on several occasions. Several worldwide developments that could have had a negative impact did not fulfill their potential. The Indian government raised import taxes but a reduced level of speculative interest in gold muted the impact.  Similarly, concern that the US would cease quantitative easing has faded and investors in exchange traded funds retain a healthy appetite for the metal. The missing ingredient for the next part of the ascent is a driver to help scale the USD 1710/oz level. Once that is done, we could well see a move back up to USD 1750/oz and even further towards USD 1800/oz.  

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See what Ole Hansen is also saying about oil, grains and other commodities.