In the early morning trade, June gold is slightly up and currently trading at $1,248.2. After a strong advance in the US dollar this week and relatively strong global markets, June gold has been holding onto this week’s rally with just a minimal pullback. After gold put in a double top on a daily chart this week, there has been a drop in open interest which means the gold bulls can be running thin, and the market can be overbought for the short-term. Furthermore, if the US dollar continues to rally, look for even a larger selloff and lower prices.
If we take a look at the daily June gold chart, you’ll clearly see the double top that June gold is trying to complete with a further selloff. If the selloff does in fact continue, then look for some buying or support down where the 20 and 50-day moving averages are, which currently rest at $1,232.0. However, if these support areas don’t hold, then look for a selloff all the way back down to $1,200.0 an ounce. For the gold bulls, if gold can break above this week’s high of $1,264.2 (The Double Top), then look for a rally up to and probably above $1,300.0 an ounce. Below is a daily June Gold chart with all the technical level from today article.