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Gold Futures Analysis 1 June 2012

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Gold Chart 1 June 2012

A hugely positive day for gold bulls today as the precious metal  found some very strong momentum breaking through its recent sideways congestion.   The strong platform of support in the $1520 per ounce price area provided the springboard and with the price of gold breaking through the psychological $1600 per ounce price point we can now expect to see gold continue to move strongly higher.  However, gold will first need to re-test the strong resistance in the $1635 per ounce region which extends through to $1688 per ounce.   In order to break through this region we need to see sustained buying on our Hawkeye charts which should then give the precious metal the necessary momentum to reverse its recent downwards trend.  So whilst today’s strong move higher is a positive sign gold still has some technical obstacles to overcome.

From a fundamental perspective this move higher is hardly a great surprise given this week’s dismal performance by the markets which culminated in appalling non farm payroll numbers from the US earlier and yet more poor data in Europe.  And all this against the ongoing shambles of the eurozone crisis.  It is therefore no  great surprise to see traders and investors simply give up and return to the ultimate safe haven that is gold.