As of this writing, gold is near the 1775.00 juncture as it trades above mid-term support levels it has tested briskly the past two days. Gold began the month of June above the 1900.00 level, but the past four weeks have not been kind to the precious metal, and it took a strong hit on the 16th of June when the U.S Fed published its FOMC Monetary Policy Statement.
Technical traders who are aggressive should be intrigued by the lower values in gold. On the 16th of June, the precious metal was trading near the 1860.00 mark; on the 29th of June, gold fell below the 1750.00 level. The last time gold has traded near these lower values was the last week in April. If speculators are interested in buying gold they should not become too aggressive, but there is a reason to believe that risk/reward scenarios favor buying positions near term.
Yes, gold did trade near the 1720.00 juncture in early April and in fact tested lows of 1675.00 twice in March. Conservative traders may be inclined to see if gold can sink that low, and bearish traders could try to short the precious metal and target lower values too. While it is possible gold could certainly track downwards, it seems rather remote that the precious metal could sink to the depths of March, because fundamentally there remains a strong element of concern regarding the potential of inflation, which will likely keep financial institutions involved on the buying side.
Technically, if financial institutions remain even slightly concerned about inflation, buying gold at these lower values could prove to be a good long-term move for them. Short-term speculators cannot concern themselves with long-term implications, but this suspicion may be enough to create solid support around the current market price of gold.
Gold can be volatile, but traders may be making a rather intriguing decision to pursue the precious metal on slight pullbacks if they develop in the short term. Conservative traders may want to wait for gold to retest support levels seen two days ago, but the question is if gold will traverse that low again before the week is finished. More aggressive traders can wait for slight drops in price to nearby resistance levels, use secure stop-loss ratios and aim for incremental climbs. Buying gold at its current depths after suffering a downturn may feel dangerous, but it could prove to be a worthwhile short-term wager.
Gold Short-Term Outlook:
Current Resistance: 1785.00
Current Support: 1769.00
High Target: 1795.00
Low Target: 1756.00
