Morning Futures Roundup
Lack of Confidence Shakes Gold
Gold futures have followed the broad commodity market lower, as investors' funds pour into US Dollars. The uncertain economic future of Europe has resulted in the greenback being the safe haven bet for investors. The week began on a sour note, after France elected a far left candidate to take over the presidency of the nation. France had been one of the few bright spots for the embattled EU, and there are fears that a leftist president could slow a potential recovery. The failure of Greece to push through austerity measures reinforces the fact that investors simply cannot trust the nation to make the needed sacrifices to remain solvent. Commodity markets as a whole have been pummeled in recent sessions, especially energies, which are suffering because of inventory builds and the prospects of slower growth.
Turning to the chart, we see the June Gold contract breaking through the 1600 level on the chart, which was technical and psychological support. Prices are now in danger of making a run at the relative low close of 1540.90. Failure to hold that near-term low could trigger widespread selling. The RSI is nearing oversold levels, which could offer the market support in the near-term. Prices bouncing off intraday lows yesterday resulted in a lower wick forming on yesterday's candle, hinting at prices possibly gaining some traction.
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