The gold market was pretty negative during the month of June, as we've seen quite a bit of US dollar strength. Ironically, interest rates in the month of June in the United States fell for the majority of the time, which goes against the conventional wisdom. That being said, the strengthening US dollar is partially due to the fact that currency traders believe that the Federal Reserve could raise interest rates twice between now and the end of the year, suddenly.
That is in contrast with falling yields in the bond market, so I think we have some type of resolution we have to get to. In order to simplify the situation, I'm just paying attention to what I think is the most important price on the chart, and that's the $4,000 level.
The $4,000 level is a large, round, psychologically significant figure that's been important in the past. All one has to do is look at the support it offered in November of 2025, and now I think a lot of options traders are probably watching this area as well.
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If we were to break down below the $4,000 level with any type of momentum or significance, I think that opens up a move down to the $3,500 level. On the other hand, if we do bounce from here, and at the end of June we are trying to do just that, we could see a move to the 50-week EMA sitting at $4,260, possibly even the $4,400 level. That would be an area that I think you would see a lot of selling pressure unless, of course, the overall fundamentals change.
And really, at this point in time, I don't see a whole lot of resolution. A lot of what we had been looking at previously was the idea of the war causing inflation to spike, but now traders are starting to talk about inflation may be a bit of a moving target. I think the month of July will be huge for gold in one way or another, and I will continue to focus on the $4,000 level.
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