June 20th Gold Trend Analysis

In last nights update on the website resistance was listed at 1547-1553 and the high so far today is 1547. Support was listed at 1526-1533 and the low so far today is 1532.70

Short term Trades:

I’m currently long from 1526 ; On the Website last night I listed I was selling 1/2 at 1546.80 –and that order was filled this morning. I had an order to Rebuy the position back at 1535.20 if the 1546.80 order was executed. That order has also been filled. Thus I remain long one full position (2 contracts)


London Gold Fix $1,537.00 +$10.25

Despite a meeting of Euro zone finance Ministers over the weekend, the situation in Greece remains in a state of flux. Apparently the Ministers are going to require Greece to undergo an austerity test again and that could cause even further protests in Greece and even more fear mongering in the marketplace. News overnight that Japan saw a trade deficit in the month of May, suggests that the Japanese manufacturing sector remained in a partial shutdown last month and that news would seem to contribute to the fear of slowing in the world equity markets. With a major US investment banker over the weekend revising its US growth outlook downward and that news combined with weakness in a host of commodity markets keeps us cautious this morning. On the other hand, the Greece situation remains precarious and it has caused some analysts to become very bearish toward the future of the Euro zone and that story might be able to garner the upper hand for gold bulls.

The US Dollar is stronger against most of the major currencies this morning. EU finance ministers have delayed a decision on extending 12 billion Euros of emergency loans to Greece until that nation passes new austerity measures. The Japanese Trade deficit during May was 854 billion Yen, a larger deficit than market expectations. German PPI during May was up 6.1% year-on-year, lower than forecasts. There are no major US economic numbers to be released this morning.

Going to the Charts:

Gold remains above the lower purple channel line and the trend remains up so far. The lows so far today have held the 61% retracement level on pullbacks and that is support for today — circa 1526-1533. Resistance remains the 1547-1553 area for the remainder of the day.

The key for gold is for price to close above the 1553 area if we are to get a continued uptrend this week. On the downside — as long as price closes above 1526, the uptrend will still be intact. A close below 1515 would suggest a shorterm downtrend is taking hold. As long as price is above the purple channel line — favor higher.

Key today is the 1547 area on the upside as the price to move above —- and on the downside 1526-1533 is first support followed by 1519-1522.

As long as we are above 1526-1533 — favor higher.

The feds will release the interest rate decision at mid day Wednesday – and expectations are they will leave rates the same. Options expiration on metals is the 25th — and that may also curtail the upside early this week. I think they begin meetings on Tuesday. Things may remain range bound until after the fed results on Wednesday.

by Bill Downey

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