Euro Gold responding to Portuguese and Irish Woes

Gold priced in terms of the Euro, or Euro-gold, is moving strongly higher this morning as investors on the Continent are becoming increasingly worried over developments in Portugal and Ireland. Talk is increasing that an EU bailout is very possibly in the cards for Portugal and that is drawing money into Gold over across the pond.

The weakness in the US Dollar has helped to keep a lid on Euro-gold as the Euro has been very strong over the past couple of weeks. That is changing today with the Euro being sold over fears as noted above. With gold moving higher in US Dollar terms and the Euro sinking, that is helping to move the price of Euro gold higher.

As noted on the price chart below, it is moving back above most of the major moving averages and very close to generating a buy signal. From a technician's standpoint, I would like to see it move through the 1040 level although a push through 1030 would certainly raise the alarm bell among some of the shorts.