Here’s What To Watch As Gold Attempts A Comeback

In May and June, gold fell by approximately 8% from its peak as bonds sold off and higher interest rates started to bite. As I explained in my last update, gold’s spring sell-off caused it to break down from a channel pattern that had formed since the fall of 2022. A channel break-down is usually a sign of further weakness ahead unless it is negated by a break back into the channel.

At the moment, gold is attempting to re-test the lower portion of the channel. If gold can break back above, then that is a bullish sign. If gold bumps its head at the channel, however, then that would be another sign of weakness. It is also important to keep an eye on the $2,000 to $2,100 resistance zone that is just overhead. If gold can close above that zone in a convincing manner with high volume, then that would be a very bullish sign.