The past two sessions for August GOLD futures have been dominated by bearish sentiment. Following an early day spike in value last Friday, prices have fallen consistently. At press time (12:30 PM EST), it looks like bullion is ready to close the session beneath 1350.0.

It seems as though FED expectations are ruling pretty much every market today. Friday’s release of a decent U.S. Retail Sales report for June brought sellers to gold in droves as rate-cut expectations dwindled. Today’s action has been much tamer, even though the New York Empire State State Manufacturing Survey posted an unprecedented decline. At least to open the week, traders are happy to take a neutral stance ahead of Wednesday’s FOMC meeting.

August Gold Futures Continue To Lag 1350.0

From a purely technical perspective, August gold futures are in bullish territory. The daily uptrend of early June remains valid as prices are holding firm above the 38% Fibonacci Retracement level (1328.7).

Here are two support and resistance levels to watch as we roll toward Wednesday’s FED Announcements:

• Resistance(1): Psyche Level, 1350.0
• Support(1): 38% Current Wave Retracement, 1328.7

Bottom Line: In the event this market continues to show weakness, I will have buy orders queued up from slightly above the 38% Current Wave Retracement at 1329.5. With an initial stop at 1327.0, this trade yields 25 ticks profit on a standard 1:1 risk vs reward management plan.