June gold futures last week hit a fresh six-week high of $698.00 an ounce. Prices have backed off a bit this week on some profit-taking pressure, but the bulls still have the solid near-term technical advantage. A six-month-old uptrend line is in place on the daily bar chart for June gold futures. The next upside price objective for the bulls remains major psychological resistance at $700.00 an ounce. If the bulls can push June gold futures prices over the $700.00 hump, then more sizeable price gains on the upside could be expected. However, pushing the precious yellow metal above $700.00 has been, and will be, no easy chore for the bulls.
In February, the bulls were able to push June gold up to the $699.00-an-ounce level, only to see prices back off sharply, by over $50.00 an ounce. Prices have since recovered, but the $700.00 level remains elusive. And if gold prices do back off significantly from present price levels, then the specter of a bearish double-top reversal pattern would loom on the daily bar chart.
click on the chart to enlarge
The gold market bears would gain fresh downside technical momentum to begin to suggest that a near-term market top is in place if they could push and close June futures below solid chart support at $675.00 an ounce. However, serious near-term technical damage in June gold futures would not be inflicted until prices dropped below trend-line support at the $650.00 price level.
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