This is the highest daily closing price in June gold futures in the past six months. The last time that the June futures contract closed above today’s settlement price was on Election Day, November 9th 2016.
Today’s close at $1,274.20 is also five dollars over the 200 DMA. If we get a follow through rally tomorrow and another higher close, then the technical traders will be calling today’s move a break out to the upside. At this point I’m willing to say that we should see gold test resistance at the big $1,300 level in relatively short order.
Today’s move higher in gold futures comes mainly from a risk off vibe in the outside markets and weakness in the US Dollar. Geo-politics are at the forefront of news since last Thursday evening when President Trump launched airstrikes on Syria. Since then there has been a lot of sabre rattling from Syria and Russia. Meanwhile, North Korea needs some attention too and is threatening “catastrophic consequences” for the US. China is being squeezed now too, to get North Korea under control.
Without the geo-political tensions, I’m not so sure that gold will be able to see much follow through. However, if things happen to escalate then $1,300 will not have any resistance at all. This market will be head-line driven for the foreseeable future. Gold futures like $25 and $50 incremental moves. I think gold has a bottom at $1,250 now. Today’s close near $1,275 puts $1,300 in range now.