gold futures

June Gold Futures Fall Beneath $1700.0

Posted Monday, May 11, 2020 by
Shain Vernier • 1 min read

It’s been a strange trading day, with risk assets reversing course from a weak open. With only a few hours left until the closing bell, the U.S. indices are firmly in the green, and safe-havens are on the slide. June gold futures have gone bearish today, falling beneath the critical $1700.0 psychological barrier.

In addition to the selling pressure on bullion, the Swiss franc and Japanese yen have lagged vs the USD. The big mover of this group is the USD/JPY; rates have broken out of consolidation and are in a position to challenge the 108.00 level.

On the bond front, yields of the U.S. 3-Year Note Auction fell to 0.230%. This is down substantially from last week’s 0.348% and came in contrary to the short-term auctions. Let’s dig into the weekly technicals for June gold futures and see where price may be headed for the intermediate-term.

June Gold Futures Near $1700.0

For more than a month, $1700.0 has been a catalyst for two-way action in June GOLD futures. $1700.0 has acted as both support and resistance ― if we see a sharp directional move in the coming weeks, it will likely originate from this area.

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

Moving forward, here are the key levels to watch for bullion:

  • Resistance(1): COVID-19 Spike High, $1788.8
  • Support(1): 38% Retracement, $1660.8
  • Support(2): Bollinger MP, $1618.8

Bottom Line: If June gold futures break below last week’s bottom ($1683.0), a long trade may set up from just above the 38% COVID-19 Retracement. Until elected, I will have buy orders in the queue from $1662.5. With an initial stop at $1658.4, this trade produces 40 ticks on a slightly sub-1:1 risk vs reward ratio.

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Safe havens such as Gold and the JPY have been taking advantage of the financial troubles with the ban king system and lower FED rate odds
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