June gold has seen quite the selloff since the highs Seen on April 17 and it appears we’ve put the brakes on a continuation of the slide. Recent economic data in the US has been mixed. Jobless claims came in less than expectations last week, but this is also coupled with lackluster retail sales numbers posted this morning. The stock market seems to be in a very tight range and wanting to leg higher, but the data needs to continue to improve. June gold broke 1220 level recently, and flushed out longs who had stops just beneath. The firing of the FBI director was seen by traders as uncertainty in the Trump Administration, and a reason to flock to safe haven assets. Another reason gold has been supported around the 1220 area has been the moderate strength in oil, however short lived it may be. A real reason for gold to rally which should be in the minds of all gold bears is a potential military conflict following a North Korean nuclear test, which would come at any time.
The technical seem to support a the theory that 1250 is going to be new hard resistance overhead, while the 1200 physiological level as an area of solid support. I will reiterate the most important level to watch for a break in the trend and a continuation of the selloff is 1214. A break below 1214 would do a few things, break long term support on a trend going back to mid-December, and also break the most recent lows on May 9. A rally to 1240 needs to be sold into in the short term as this is the high end of the range we saw at the beginning of June.
Jun ’17 Gold Daily Chart