The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Gold bounce confounds yesterday’s early selloff
Despite the $1178 level previously acting as a reliable level of support throughout the past two months, the June price action has been very choppy and has often failed to truly respect the level. Yesterday’s gold selloff came following a strong move below support during the first week of the month and things initially pointed towards a move back to the 5 June low of 1162.
However, a strong round of buying in the afternoon brought about a sizeable doji, with a long lower shadow. This candle, which represents indecision, points to a possible reversal of trend. Thus, today will be crucial to note whether we are watching the beginning of a move higher or just a short-term retracement higher.
As such, a move above $1192 would bring a bullish medium-term outlook for a move back towards $1224. A move back below $1173, however, would point to a resumption of the recent selloff and thus a move towards $1163.