A Summer Of Discontent For Precious Metals?

London (July 3)  If Shakespeare was writing about the precious metals market at the start of July the lines might have gone something like this:

Now is the summer of our discontent

Made hideous by this selling in gold

In 2016 and 2017, gold opened the year at its lowest level and never looked back. Since December 2015 the yellow metal has been making higher lows, but as we enter the second half of 2018 that pattern appears to be in jeopardy. The price action since April has been bearish as the price of gold turned lower. In late April and early May, the precious metal fell to new lows for this year, and the price has kept on going on the downside threatening to make the summer of 2018 a season of discontent for precious metals bulls.

Gold comes into Q3 with a lower low and the threat of a technical breakdown

Nearby August COMEX gold futures settled Q2 at just above the $1250 per ounce level having traded to a low of $1246.90 on the final trading session of the first half of 2018. The yellow metal had been falling steadily since the middle of June, and the first day of trading in July took gold to another new low and lower close on Monday, July 2.

Click to enlarge 

As the daily chart of August COMEX gold futures highlights, the price fell to a low of $1240.60 on July 2 and is already below the bottom dating back to December 12, 2017, at $1251.90 per ounce.

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