Forbes: Technical Trading: Gold Bulls Eye $1,300, 'Green Light' Level For Another Rally Leg

While gold prices firmed overnight in Asia and European action, pre-New York trading has seen August Comex gold futures erase gains and push to slightly weaker levels, on the heels of a stronger U.S. dollar index.

August gold futures have posted a solid near term rally in recent days, climbing from the June 28 low at $1,179.40 to $1,297.20 on Thursday. The minor uptrend pattern is bullish.

But, for now, the bulls are being turned away by a stiff psychological resistance ceiling at $1,300—and that will remain the key near term zone for traders to monitor.

So-called “round-numbers” like $1,300 often act as both magnets for price action and also resistance. Also, the contract marked out minor congestive resistance on June 21 and 24, with daily highs right around $1,300.

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CNN Money: Gold bugs regain some swagger

After enduring a brutal sell-off this year, gold bugs appear to be making a stand.

Gold prices rose 1% to $1,246.90 an ounce Tuesday after earlier making a run at $1,260.

Of course, gold is still down more than 33% from the all-time highs near $1,900 in September 2011.

But Tuesday's rebound raised hopes on StockTwits that the worst is over for the yellow metal.

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Wall Street Journal: Gold’s Washout May Produce Buying Opportunity

Gold has looked so bad recently that some technicians believe it can’t get much worse, which makes it a good time to try buying.

Gold shed 12% last month, capping a second-quarter tumble of 23%, its worst quarterly performance in available history. In the process, the price of the SPDR Gold Trust GLD +1.70% exchange traded fund fell on Friday to the lowest level seen in three years.

“It’s looking like a tremendous washout,” said Mark Arbeter, chief technical strategist at S&P Capital IQ. “Sentiment has been extremely bearish,” and weekly momentum indicators have gotten oversold, “which is a good sign for [prices].”

Weighing heavily on gold were expectations that the Federal Reserve might start winding down its easing efforts, which to some investors would reduce gold’s appeal as hedge against inflation. Also hurting gold has been a rise in the value of the U.S. dollar.

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Market Watch: ‘Paradigm shift’ to send gold sliding to $1,200 an ounce: SocGen

Gold has tumbled further and faster than even the bears at Societe Generale thought in April, leading the bank on Monday to cut its year-end forecast for the yellow metal.

In a fresh note, analysts led by commodities-research chief Michael Haigh penciled in a a drop to $1,200 an ounce by Dec. 31, down from their April 2 call of $1,375 — a call that was made when gold GCQ3 -0.35% – now changing hands near $1,382 — was trading closer to $1,600. They write:

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Forbes: Technical Trading: Gold Trade Remains Lethargic, Volatility Narrows Into FOMC

Comex August gold futures are slightly weaker heading into Monday’s New York trade, but the yellow metal continues to consolidate within recent ranges.

Traders should brace for a potentially big move this week. There is an old market adage: “the longer a market coils, the longer and stronger the breakout is once it occurs.” Gold has been coiling or consolidating in recent weeks and this week’s Fed meeting has the potential to ignite some fireworks.

The main event this week will be this week’s U.S. Federal Open Market Committee (FOMC) meeting. The meeting summary is slated for release Wednesday, with Fed Chairman Ben Bernanke speaking in a press conference to follow.

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Forbes: Technical Trading: Gold Bulls Have The Edge Amid Weak Dollar And Vulnerable Stocks

August Comex gold futures edged modestly higher in pre-New York action Monday, amid weakness in the U.S. dollar index. Gold prices remain within recent ranges, but are continuing to build a minor base and bottom on the daily chart. For now, the yellow metal has found a short-term equilibrium point and price action has largely stabilized.

This week gold traders will be eyeing the U.S. employment data due for release on Friday. Any signs of a strengthening U.S. economy could support views that the U.S. Federal Reserve could begin tapering monetary policy sooner rather than later. Overall, trade could be limited to fairly narrow ranges over the next several days as traders await that key data.

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Forbes: A.M. Kitco Metals Roundup: Gold Weaker On Technical Correction, Firmer U.S. Dollar Index

Comex gold futures prices are modestly lower in early U.S. trading Friday. The market is seeing a corrective pullback from Thursday’s solid gains and is also feeling a bit of downside pressure from a firmer U.S. dollar index. Prices did hit a two-week high in overnight trading. Comex August gold last traded down $4.50 at $1,407.50 an ounce. Spot gold was last quoted down $5.40 at $1,408.75. July Comex silver last traded down $0.28 at $22.41 an ounce.

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Bloomberg: Record Gold Shorts Signal Further Price Swings: Chart of the Day

Hedge funds are making the biggest bet ever against gold prices, signaling continued volatility for the metal after prices entered a bear market last month.

The CHART OF THE DAY shows that gains in so-called short contracts are usually followed by increases in a gauge of price swings for the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund. Yesterday, the value of the SPDR Gold ETF climbed as much as $1.5 billion before ending the day down $418 million.

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Bloomberg: Gold Moving Average Signals Drop to $1,300

Gold futures, which fell into a bear market this month, are poised for more declines and may plunge to the lowest since September 2010, according to technical analysis by Fain Shaffer of Infinity Trading.

Prices may drop 11 percent to $1,300 an ounce after the metal has been unable to close above its 20-day moving average, said Shaffer, the president at Infinity Trading. Gold futures for June delivery slid 0.6 percent to settle at $1,453.60 on April 26. The 20-day moving average is about $1,480.

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