What a difference a few hours can make. U.S. equities have pared early losses, with the DJIA and S&P 500 rebounding following a weak open. Gold has led the pack thus far in the U.S. session. June gold futures are up over 1% on the day, trading in the neighborhood of 1305.0.

After a period of consolidation, and the cancellation of the U.S./North Korea summit, gold has broken out to the bull. Traders and investors have chosen to be net-long bullion, limiting risk exposure while reevaluating the future of global relations with North Korea.

Gold Technicals

June gold futures have broken out of the sideways “L” pattern on the daily timeframe. Buyers have entered this market with vigor above the 1300.0 handle.

Here are the support and resistance levels for the remainder of the Thursday session:

• Resistance(1): 20 Day EMA, 1306.0
• Resistance(2): Bollinger MP, 1308.5
• Resistance(3): Daily SMA, 1315.4
• Support(1): Psyche Level, 1300.0
• Support(2): 38% of Current Wave, 1298.4

Bottom Line: So far, the 20 Day EMA has stood tall as topside resistance. However, today’s close is going to be huge for June gold. If we see a break above 1306.0, then a test of the Bollinger MP (1308.5) is highly likely.

For the remainder of the Thursday session, I have sell orders in the queue at 1307.9. With an initial stop at 1310.1, this trade yields 22 ticks using a 1:1 risk vs reward management plan.

The action on Wall Street will play a huge factor in how this market behaves near the daily close. Any sell-off in equities will give bullion a boost. With a bit of luck, the short entry from 1307.9 will come into play by the end of the trading day.