Although gold prices closed off of their highs today. As of 4:50 PM Eastern standard time gold futures, basis the most active June contract is trading down $0.10, and currently fixed at $1279.30. The intraday highs achieved today were highly influenced by U.S. equities as the Dow Jones industrial average traded off by 280 points in the morning session. However, the Dow was able to recover slightly closing off by 134.97 points by the close at 26,462.08.
Fractional dollar strength provided mild headwinds for gold with the U.S. dollar index closing up 0.05% at 97.900. Current pricing in the dollar is above the former resistance identified at 97.75.
The NASDAQ composite traded to a intraday high of 8151.84 after opening at 8150.85, and after selling off slightly closed just off of yesterday’s new all-time record high. The S&P 500 closed in essence, unchanged.
What is noteworthy on a technical basis is the fact that after hitting the lowest price point for the year on Tuesday, Wednesday as well as today resulted in the market closing above its opening bid, as well as trading to a higher high and a higher low.
With the exception of Tuesday’s intraday low of $1267 per ounce, gold for the most part has been able to trade above a key and critical level which resides at $1273. This support level is the .50% Fibonacci retracement-based number created from a data set beginning in November when gold traded to $1196, up to this year’s highest trading price at $1350.
Recent price action suggests that gold is forming a base at this current level, however on a technical basis we need to see gold bounce off of these lows to higher pricing, or break below this key level before getting a more definitive indication of where gold prices will move from here.
Although gold prices will continue to build a base as long as the fundamentals which have been putting substantial pressure on pricing change, or new events reshape current market sentiment we could see gold prices remain in a defined trading range.
Wishing you, as always, good trading,