Gold sits on edge after a torrid month in June

Technical Analysis

Author: Justin Low | gold

Gold on course for its worst monthly drop since November 2016

Gold D1 30-06
At one point yesterday, the drop in gold threatened to turn real ugly but it managed to turn things around to close above the 29 April low @ $1,756.13.

That said, the coast isn't clear yet for gold. It is down by nearly 8% this month, staying on course for its worst monthly performance in nearly five years.

The technical picture isn't too pretty either with buyers needing to get back above the 100-day moving average (red line) and $1,800 to reestablish any momentum.

The Fed's perceived policy shift this month has been the key in accelerating the downside move after being rejected near $1,900 for gold. Now price action rests on the edge of the support level pointed out above.

The US non-farm payrolls release on Friday is likely to provide the next catalyst and a strong report there (both headline and wages) may be enough to trigger the next downside leg in gold with the double-bottom in March one to keep a keen eye out for.
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