Gold

Closing price in previous report: 1745.25 Current Level: 1779.85 (+1.9%)

Observations on the daily chart: In the May 2020 report, Gold prices were consolidating between 1700 and 1800. Despite the upward bias, Gold has not seen a weekly close above 1800 since September 2011. This indicates a lack of conviction. Prices are trading above the 18 day and 50 day moving averages. These averages are likely to be the near term support for the index.

Observations on the momentum oscillator: Momentum continues to weaken as prices rise. This a bearish divergence and could indicate further weakness in the near term.

Summary: Gold prices are in a long term uptrend and is currently trading in a strong supply zone between 1700 and 1800. Momentum shows weakness and a likely reversal in prices in the near term. It looks highly unlikely that Gold will record a weekly close above 1860. The bearish alternative: selling pressure could increase as prices fall below 1700 and take prices lower towards 1600. Sideways markets creates uncertainty of the future direction of prices. Trades should be placed only after a trend is confirmed rather than attempting to preempt a market direction which usually results in being trapped in the wrong side of a trade.

It is possible that the trend may reverse suddenly, strict stop-losses should be maintained

Important price points:

Resistance levels: Weekly close above 1860 (+4.5% from current level)

Support levels: 1700 (-4.4% from current level), 1600 (-10% from current level),

1550 (-12.8% from current level).