gold futures

Daily Double Bottom In View For Gold

Posted Monday, May 20, 2019 by
Shain Vernier • 1 min read

Safe-havens have been on the ropes for the past five sessions, led by a downtrend in June gold futures. Following last Monday’s panic buying and test of 1300.0, sellers have taken complete control of this market. The failed crash in U.S. stocks is the primary culprit, with those who bought bullion near last week’s highs being left out in the cold. Now, a daily Double Bottom pattern in June gold is coming into view as downside support.

A quick look at today’s action in safe-havens shows mixed performance across the sector. Gold futures and U.S. Treasuries continue to lag, but the Swiss franc and Japanese yen have posted intraday gains. Even though U.S. indices remain in the red, investors are in no hurry to liquidate holdings and head for the hills.

Daily Double Bottom In View For June Gold Futures

The sharpness of Friday’s sell-off in June gold futures came as a surprise, especially given the uncertainty surrounding U.S./China trade negotiations. Investors chose to exit bullion, and many cases, go home short over the weekend break. This is a bold statement ― one that points to a hawkish FED week and pending U.S./China resolution.

June Gold Futures (GC), Daily Chart
June Gold Futures (GC), Daily Chart

Here are two levels to watch for the near future:

  • Resistance(1): Daily SMA, 1280.4
  • Support(1): Double Bottom, 1267.9-1267.3

Bottom Line: Until elected, I will have buy orders in the queue from 1268.6 in June gold futures. With an initial stop at 1263.6, this trade produces 50 ticks using a 1:1 risk vs reward management plan.

Monetary policy is going to be the story this week, with the FED and FOMC dominating headlines. In the event that equities recover and close in the green today, we may get a shot at buying in from the June GOLD Double Bottom in the coming 36 hours.

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