Gold Futures are Basing a BottomPosted 05/10/2018 9:53AM CT |
Gold futures continue to chop around in a sideways trading range of roughly $1,305 to $1,370. The June futures contract has, in my opinion, now based a bottom and is ready to move back towards the $1,350 range. Today June futures are currently trading at $1,320. The 200-day moving average is $1,315. A close at this level or higher would be considered supportive and encourage the bulls to add to the long positions. I like gold at these levels for longer term positions. The only reason that the corrective selloff has reached this level is due to the strength in the US dollar. I believe that is happening because China is buying dollars to devalue the Yuan! Gold does well in a “safe-haven” trade or a weak dollar trade, however, energy prices are very strong and that becomes inflationary. Gold performs best in an “inflationary trade.” I see inflation really heating up and energies are just the leader in the beginning of another commodity bull market. Gold will follow…
Gold needs to have a close above the 200-DMA at $1,315 and then again above $1,325. If this bounce gets rejected, then we will likely see a “hard” test of $1,300.
Gold Jun ’18 Daily Chart