Gold shows resilience as it unsuccessfully tries to break and close above $2400

Gold has had a minor decline today. Gold futures basis the most active June 2024 contract open $2391, traded to a low of $2375, a high of $2402.70, and finally at $2385.50, after settling lower by nine dollars cents or 0.39%. These moderate winds occurred after gold strong ornaments rose to five dollars yesterday and rose over $16.90 on Tuesday.

Dollar weakness and higher yields and US government debt instruments. Contributed mild headwinds as it gained 0.23% taking the dollar index to 104.534.

Although gold traded lower today it did make an impressive reach for the elusive $2400 per ounce value. However, that could not be sustained. Gold futures staged a rally in trading overseas. On an hourly chart, we can see that the move to reach that key psychological level began at approximately $2363, and on an hourly chart, it took the final leap upward trading to an intraday high of $2402.70 before closing below that key psychological level at $2396.50. What followed was a slow decline taking gold to the settlement close of $2382.

Although gold is trading at just under $2400 per ounce it is still looking to retest that key psychological number. While gold traded above that to a high of $2448, it did not take very long for a correction to begin and the erosion of $2400 as a level of support. Currently, the first level of resistance is and remains at $2400 per ounce. Major resistance is at $2448 exactly.

In a report today, TD Bank economist Marc Ercolao said, "Gold prices should remain strong as speculators continue to anticipate the start to the Fed cutting cycle. We are projecting nominal and real bond yields to head lower in the back half of the year, and coupled with strong demand, we've raised our gold forecast to $2,250/oz in 2024 with elevated levels expected to persist into 2025,".

While gold did trade lower today it occurred after challenging $2400 and not breaking hard to the downside. Based on all of the fundamentals and technical studies that we have viewed it still seems highly likely that gold prices will remain supported at least at $2350, and more so challenge $2400 per ounce on a closing basis and forming a base creating a level of strong support at the new level high.

Wishing you as always good trading,