For the tenth time in twelve sessions, the August gold contract failed to decisively close above the $940 level, setting a hard resistance level.Due to the firm resistance and the failure of the market today, from a purely technical perspective a move down to $894 cannot be ruled out. Though the US dollar index appears to be ready to roll over on the charts and take out the June 2 lows, weakness in the stock markets today and falling consumer confidence helped sour prices today, as the confidence reading fell to 49.3 from 54.8.
Again, today, traders saw a tight correction between the US dollar and gold. It will be interesting to see how the US dollar moves compared to the stock markets as we head into the 2nd quarter earning reports soon.It is plausible that if the earnings are weaker than expected, a slide in stocks could help support the dollar, as seen previously.Prior to the release of the consumer confidence report the US dollar had traded into negative territory but moved into the green for the rest of the session afterward.Tomorrow’s report schedule includes construction spending, existing home sales, and the ISM manufacturing index, so there is plenty of information to help swing the market one way or another.Unless the market receives some bullish surprises, look for the bears to have the edge heading into a shortened week.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use our online paper trading service BriteTrak,contact me attom@altavest.com. Visit www.altavest.com to request a FreeTrading Kit. Keep in mind that there is risk of loss in all trading.
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