Buying The Dip In August Gold Futures - Forex News by FX Leaders
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Buying The Dip In August Gold Futures

Posted Wednesday, June 26, 2019 by
Shain Vernier • 1 min read

August gold futures have taken a bearish turn, falling beneath the 1425.00 level. Risk sentiment has been unexpectedly boosted, fueled by fresh optimism over the coming G20 Summit. Currently (11:30 AM EST), rumors are hitting newswires that the U.S. and China may be closing in on a trade war resolution.

A few hours ago, Treasury Secretary Mnuchin commented that there “is a path” to the U.S. completing a trade deal with China. While Mnuchin’s statements are by no means a slam-dunk, they have brought moderate optimism to U.S. equities and the USD. Conversely, gold futures are pulling back.

August Gold Futures Sell Off

The good news is that we may have a buying opportunity coming into play for August gold futures. Trade war hopes have challenged the prevailing uptrend, washing out a large number of long position stop losses beneath Tuesday’s low (1415.1).

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

Here are the levels to watch going into the second half of today’s trade:

Resistance(1): Swing High, 1442.9
Support(1): 38% Current Wave, 1397.3

Bottom Line: In the event “risk-on” becomes the theme later this week, going long in August gold futures will set up as a viable trade. A pullback to the 38% Current Wave Retracement (1397.3) will provide a solid entry point.

Until elected, I will have buy orders in the queue from 1398.1. With an initial stop loss at 1394.4, this trend-following trade produces 50 ticks profit on a return to the 1405.0 level.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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