Finally
XAUUSD
broke through its multi months support at 1,305 USD and has moved clearly below 1,300 USD. We have anticipated this scenario since end of January. Now all the weak hands, that have emotionally been buying gold during the tricky sideways consolidation in spring, are under water and are shaken out. This moment of panic is coming closer and closer.
But the fact, that gold has not collapsed (compared to autumn 2016 when it broke down below 1,300 USD as well) is positive. Despite the technical damage it has hold up quite well so far. Actually gold is pretty oversold on its daily and on its weekly chart. Short-term this could lead to a little snap back rally in the next couple of days. But I guess for now, bulls will have a hard time pushing gold back above 1,305 USD. Especially since seasonality remains bearish until end of June.
At the same time the commercial players have significantly reduced their short position in
GC1!
. They will have to cover approximately another 38,000 short contracts to shift the very important CoT constellation into a bullish mode! Silver´s CoT are already looking very bullish!
To conclude, gold is under pressure but is moving closer and closer to its low and important turning point. I still expect lower prices to come but don’t see gold crashing here. Short-term I expect a short-lived bounce, followed by another sell off probably during the extremely weak seasonal month of June. We continue to patiently wait for gold to move into our buying zone around 1,280 – 1,250 USD. There is still no reason to chase the metal at this point. But its time to get prepared....
XAUUSD
broke through its multi months support at 1,305 USD and has moved clearly below 1,300 USD. We have anticipated this scenario since end of January. Now all the weak hands, that have emotionally been buying gold during the tricky sideways consolidation in spring, are under water and are shaken out. This moment of panic is coming closer and closer. But the fact, that gold has not collapsed (compared to autumn 2016 when it broke down below 1,300 USD as well) is positive. Despite the technical damage it has hold up quite well so far. Actually gold is pretty oversold on its daily and on its weekly chart. Short-term this could lead to a little snap back rally in the next couple of days. But I guess for now, bulls will have a hard time pushing gold back above 1,305 USD. Especially since seasonality remains bearish until end of June.
At the same time the commercial players have significantly reduced their short position in
GC1!
. They will have to cover approximately another 38,000 short contracts to shift the very important CoT constellation into a bullish mode! Silver´s CoT are already looking very bullish! To conclude, gold is under pressure but is moving closer and closer to its low and important turning point. I still expect lower prices to come but don’t see gold crashing here. Short-term I expect a short-lived bounce, followed by another sell off probably during the extremely weak seasonal month of June. We continue to patiently wait for gold to move into our buying zone around 1,280 – 1,250 USD. There is still no reason to chase the metal at this point. But its time to get prepared....
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