Gold Prices Rebound Modestly, Trapped Below Down Trend Lines
Gold prices have experienced a minor rebound, driven by short-covering and perceived bargain-hunting, following last week's low of $865.00 an ounce. However, prices remain below downtrend lines drawn from February, March, and April highs. For the gold market bulls to gain momentum, a close above $920.00 is required, while bears would gain advantage with a close below $865.00. The price trend remains down, with bears enjoying a near-term technical advantage.
Key Takeaways:
- Gold prices have made a modest rebound from last week's low of $865.00 an ounce, driven by short-covering and perceived bargain-hunting.
- Prices are still trapped below downtrend lines drawn from February, March, and April highs on the daily bar chart.
- A close above $920.00 is required for gold market bulls to gain fresh, significant upside near-term technical momentum.
- A close below $865.00 would open the door to a price slide to the $800.00 area, providing fresh downside technical momentum.
- The gold bears still enjoy the near-term technical advantage due to the price trend on the daily chart being down.
- Gold traders will monitor the value of the U.S. dollar versus other major currencies, with solid downside pressure in the dollar being bullish for gold and bigger upside price moves being bearish.
Statistics:
- Current gold price: $865.00 an ounce (June futures).
- Strong technical resistance: $920.00 (June futures).
- Solid trend-line resistance: $933.00 (June futures).
- Strong technical support: $865.00 an ounce (June futures).
- Potential price slide: $800.00 area.
Sources:
- Dow Jones Commodities News via Comtex
- Jim Wyckoff, contributing to Dow Jones Newswires
- Dow Jones & Company, Inc. (Copyright 2009)