Following a massive June run-up, gold has had a much rougher go of it in July. Prices appear to have topped out just short of $1450 before retracing to the $1400 level. Given a “flexible” FED and equities markets near all-time highs, one has to wonder if bullion’s spring rally is going to turn into a summer retracement.

At 11:00 AM EST, the U.S. FED Monetary Policy Report was released to the public. Here are some of the highlights:

• U.S. economic growth came in “solid” during early 2019
• FOMC will remain flexible and take action “as appropriate” in concert with current data
• Investment spending is decelerating
• U.S. and global tariffs are a factor in the slowing of international trade
• The U.S. labor market continued to strengthen for Q1 and Q2 2019

To sum things up, global tariffs are negatively impacting economic activity, the U.S. outlook is solid, and FED policy will remain flexible. The news isn’t yet being priced into the markets, as evidenced by a relative about-face from August gold futures since the release.

August Gold Futures Tighten Near $1400

$1400 appears to be a magnet for August gold futures, drawing modest two-way action. Since the plunge following this morning’s NFP release, August GOLD is hovering just above the daily 38% Current Wave Retracement (1397.3).

Going into next week’s trade, here are two levels to be aware of:

• Resistance(1): Double Top Pattern, 1442.9 – 1441.0
• Support(1): 38% Current Wave Retracement, 1397.3

Overview: For the time being, a bullish bias is warranted in August gold. The price action of July has certainly been disjointed, yet the market remains above the daily 38% Current Wave Retracement (1397.3). Until we see trade established in the 1375.0 area, the June uptrend will remain technically valid.