In the early morning trade, June gold is trading slightly in the green at $1,295.5. Overnight weakness in the U.S. dollar has not yet pushed gold back above the $1,300 an ounce handle like it should have, which may be a sign of vulnerability in the gold market. Furthermore, with a better than expected non-farm payroll number this morning with 196K new jobs added last month should cause the U.S. dollar to strengthen some and may cause June gold to trade down to at least the 200-day moving average which reads at $1,267 an ounce today. The thought process on this from traders and investors alike is that with the strong jobs number signals a strong U.S. economy which should result in money flowing back into the U.S. dollar because it offers the best relative growth prospect. A disappointing number would cause money to flow back into gold acting as a safe-haven for economic uncertainty.
If you take a quick look at the daily June gold chart, you can see that the bullish trend that gold has enjoyed since mid-November broke through that at the very end of February and has had a hard time staying above the $1,300 handle since. Also, gold is trading close to the lows or bottoms it’s been making over the past couple of months; therefore, if it breaks below this week’s low of $1,284, then look for gold to test the 200-day moving average at $1,267 an ounce.
Gold Jun ’19 Daily Chart