Gold markets at the end of June are sitting at a very interesting level, as it looks like we are trying to test a major uptrend line. The month of July will be about whether or not we can stay above the $1800 level. $1800 level is going to be a complex area of support, and as a result, I think a lot of traders are paying close attention to it. If we were to break down below the $1800 level, its likely that the market could start to accelerate to the downside.
It‘s worth noting that the market has seen a lot of consolidation between the $1800 level and the $1880 level above. The market has been very noisy over the last couple of months. I think gold will continue to be very noisy during the month, especially as the interest rate markets in America continue to show yields rising. As long as that’s going to be the case, its likely that the gold markets are going to be very difficult.
You need to keep an eye on the 10-year yield, because the higher it goes, the lower gold will go, and of course vice versa. If we break above the 50 Week EMA, then we will more likely than not go looking to the $1880 level. Breaking above that would be a major turnaround, perhaps kicking off a move to the $1920 level, perhaps even the $2000 level after that. I think volatility is probably the one thing you can probably count on during the month, so its likely that you need to look at this market through the prism of a short-term market that wants to go back and forth before it makes a bigger move.
If and when we break below that $1800 level, then its likely that we could drop all the way down to the $1700 level. A lot of this is going to come down to chatter coming out of central banks around the world, as the interest rate situation continues to be a major driver. That being said, you will have to spend most of the month paying attention to Jerome Powell, Christine Lagarde, and many other central bankers. Eventually, I do think gold will become a very bullish market, but this month coming up is likely to be very noisy to say the least.