Gold price tests May lows as investors flee the safety of the precious metal

June 6, 2020

New York (June 6)  The price of gold is currently trading (as I type) down around $36.24 or -2.11% at $1677.77. The low for the day reached $1670.98. That was just off the month of May low price of $1670.71.

May low at $1670.71_

On a move below that level the swing low from April 21 comes in at $1659.55.  Below that the 38.2% retracement of the move up from the March low to the May high, AND the 100 day moving average near the same level,  make for a key target at $1645.50  Will the market make a run at that key support target (today or next week?). 

With anxiety from the coronavirus fading (although it will be interesting to see the numbers in 2 weeks time given the mass demonstrations seen this week) and the jobs report signaling a sharp rebound earlier than expected, that should keep the pressure on the precious metal.

Drilling to the hourly chart, of interest was that the high price yesterday stalled right against the 200 hour moving average (green line in the chart below).  Also a swing high on Wednesday stalled against that moving average level before moving lower. The holding below those levels kept the bears in play and more in control. The jobs report was a catalyst for more selling today.

What keeps the sellers more in control? What is the risk for sellers?

Staying on the hourly chart, the 38.2% retracement of the move down from yesterday's high comes in at $1690.29. The 50% retracement comes in at $1696.26. Staying below that area keeps the bears in control, and represents the risks for shorts.

Summary: Sellers are making the play today, but they have run into support against the May swing low.  A double bottom is in play against that level. 

However, if the price can stay below the $1696.26 level (call it $1700), I would expect the sellers to remain in control and continued push lower with key support at $1645.

ForexLiveNews

Silver Phoenix Twitter                 Silver Phoenix on Facebook