Gold futures were under strong selling pressure on Thursday morning, as it appears the risk appetite among traders has increased amid this week’s solid rally in the U.S. stock market, which has seen the indexes hit multi-month highs. Gold had benefited in recent weeks and months from perceived safe-haven buying of the precious yellow metal amid the world economic recession and financial market debacles. June Comex gold futures prices are presently in a 10-week-old downtrend on the daily bar chart. The Moving Average Convergence Divergence (MACD) overlaid on the daily bar chart for June gold futures shows that MACD line is poised to produce a bearish cross below the “trigger” line of the indicator.
click on the chart to enlarge
In recent months, these bearish line crossover signals produced by the MACD indicator have preceded solid downside price pressure in gold futures. A close in June gold futures below strong technical support at the April low of $865.00 would produce more serious near-term technical damage to then suggest a challenge of the January low of $805.20, basis June futures. For the gold market bulls to regain some fresh upside near-term technical momentum they would have to push and close June futures prices above strong technical resistance at $920.00. That would also push prices above the aforementioned downtrend line on the daily bar chart.
Stay tuned! Jim Wyckoff jim@jimwyckoff.com
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