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.

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.