Tomasz Wisniewski
Axiory Global Ltd.
June for the gold buyers was very bad, can July be different ? Recently few signals that can potentially brighten the day for the bulls emerged on the chart. Maybe the time that on the stock market we have a full risk-on mode is not the best to buy gold (or maybe that is exactly the best time to do that?) but from the fundamental point of view we have USD weakness which usually supports the price of the commodities.
Latest upswing on Gold that we saw on Friday was obviously made with a huge help from the weaker USD but the fact is that it happened in a perfect moment and helped to create a very solid bullish reversal pattern. That creates a situation where technical analysis is supported by the fundamental one (at least some parts of it). From the technical side we do have here an Inverse Head and Shoulders pattern. Formation is active as we already broke the neckline (black). In the same time the price went through the mid-term down trendline (blue, present on the chart since the 7th of June) and that allows us to be a little optimistic here. The closest resistance and the target for the current sentiment should be the horizontal area around 1240 USD/oz (green). The closest support is the neckline. If buyers will allow the price to come back below that line there will be no hope left for them in the mid-term.
In the same time, on the silver we do have a V-shape recovery, which also creates a false breakout of a very important horizontal support (15.8 USD/oz). That is the factor that can increase the positive sentiment to the precious metals, positively affecting Gold too.
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