Much like many other asset classes Gold managed to rally on weak US numbers suggesting a possible rethink of US monetary policy in the June meeting. Prices however failed to see a follow through pulling back Thursday as it approached the daily consolidation ceiling. Note market has bought Gold to historic highs of geopolitical issues and inflation concerns. Should the Fed cut rates to address a softening in the economy this does not necessarily translate to a hedge for more inflation pressures. As for today’s trade we have little in the calendar that could introduce a fresh perspective.
Resistance
- 2431.45 – Historic High
- 2417.83 – Daily Consolidation High
- 2398.47 – Daily Consolidation Ceiling
Support
- 2370.52 – Pullback low
- 2351.75 – Daily Low / High
- 2333.50 – 20D Moving Average
Given the strength of resistances and yesterday’s pullback immediate risk for us is for prices to ease further. A push under 2370.52 could be seen as an entry for a further pullback. We will also consider long wicks in the hourly charts coming off 2398.47, Daily Consolidation Ceiling as an excuse for jumping short. An hourly close above the said price could call for a test of the historic highs.
