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Gold Traders' Report - June 8, 2018

Jim Pogoda, Trader, Gold Bullion International 
JUN 8, 2018

Gold was either side of unchanged overnight, trading in a range of $1294 - $1301. The yellow metal dipped to its $1294 low during Asian hours where it found support at Wednesday’s low.

It faded a rise in the DX (93.38 – 93.60), which was aided by a slip in the euro ($1.1810 - $1.1775). Later during European time, however, gold rebounded to reach $1301, matching the highs from 6/5 and 6/6.

This was despite the DX continuing to climb (93.72), which was boosted by further weakness in the euro ($1.1745, miss on German Industrial Production).

Gold was supported, however, by a decline in the US 10-year bond yield (2.95% - 2.889%), and softness in global equities.

The NIKKEI shed 0.6%, the SCI was down1.4%, Eurozone markets fell from 0.4% - 1.3%, and S&P futures were off 0.6% - as expectations for a contentious G7 summit in Canada rattled markets.

Ahead of the NY open however, gold retreated to $1297 as the DX rose further (93.82), helped by a plunge in sterling ($1.3430 - $1.3360) and more weakness in the euro ($1.1728).

After opening lower, US stocks climbed through the morning hours to reach positive territory by mid-day (S&P +6 to 2777), with the consumer staples sector leading gainers.

The US 10-year yield hovered around 2.93%, but the dollar gave up some ground (DX to 93.58) as the pound ($1.3415) and the euro ($1.1778) rebounded. Gold, caught in the cross-currents, traded narrowly between $1297-$1299.50.

Into the afternoon, US stocks softened (S&P -2 to 2771) from news that Special Counsel Mueller filed a new indictment against former Trump Campaign Head Paul Manifort, and growing rumors that the G-7 won’t be issuing a joint communique due to “differences”.

The 10-year yield ticked down to 2.921%, and the DX traded down to 93.52. Gold inched up to the upper end of its range at $1299.25.

Open interest was up 4.6k contracts, showing a net of new longs from yesterday’s push to $1303. Volume was a little higher with 275k contracts trading.

All markets will continue to focus on the volatility in the equity and bond markets, geopolitical events (especially this weekend’s G7 meeting), developments with the Trump Administration (especially on US-China trade), corporate earnings, oil prices, and will turn to today’s Commitment of Traders Report followed by reports Monday on Japanese Machine Orders, Chinese New Yuan Loans, UK Trade Balance and Industrial Production for near-term direction.

Resistance levels: 

$1300 – psychological level, options

$1301 -02–triple top 6/1, 6/5,6/6, and 6/8 highs

$1301 – 50% retracement of up move from 12/12/17 $1236 low to 1/25/18 $1366 high

$1303 – 6/7 high

$1306 -08 – quadruple top, 5/24, 5/25, 5/29, and 5/31 highs

$1308– 200-day moving average

$1312 – 40 day moving average

$1315 – 5/15 high

$1317 – 50 day moving average

$1318 -19 – quadruple top 5/3, 5/7, 5/8 and 5/9 highs

$1322-23 – 5/10 and 5/14 highs

$1324 – 100-day moving average

$1325-27 – quadruple  top, 4/26, 4/27, 4/30, and 5/11 highs

$1325 – options

$1332-33 – double top - 4/24 and 4/25 highs

$1335 – 4/23 high

$1334-35 triple bottom – 4/12, 4/13, and 4/20 lows

$1333 – 50% retracement of down move from 4/11 $1365 high to 5/1 $1302 low

$1346 – 4/20 high

$1350 – options

$1355 - 57 – quadruple top, 3/26, 3/27, 4/18, and 4/19 highs

$1365 – down trendline from 7/6/16 $1375 high

$1365-67 – 6 tops 4/11, 1/25, 8/2/16, 8/3/16, 8/4/16, and 8/5/16 highs

$1375 – 7/6/16 high   

$1388-89 – double top 3/16/14, 3/17/14 highs

Support levels:

$1298 – 20-day moving average

$1290 – down trendline from 4/11 $1365 top

$1294-95 –double bottom – 6/6 and  6/7 lows

$1291  - up trendline from 12/15/16 $1123 low

$1288 – double bottom, 5/22 and 5/23 lows

$1281-82 – double bottom, 5/21  and 12/27 lows

$1275 – options

$1273 – double bottom, 12/25 and 12/26 lows

$1267 – up trendline from 1/6/17 $1171 low

$1265 – 12/22 low