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Gold Sells Off Steadily All Day Friday

ByGoldTradingExperts.com
Published 06/03/2013, 05:02 AM
Updated 07/09/2023, 06:31 AM

After hitting a high just below 1422 overnight on Thursday, gold sold off steadily all day Friday, falling below 1400 and closing near the lows of the day at 1388.

The price action saw a "bearish engulfing" candlestick formed on the daily chart, which portends lower prices and suggests that the rally above 1400 was a false breakout.

We expect lower prices this week, with the possibility of a retest of 1322 as the bears have taken control back from the bulls.

For the recent gold rally to get back on track, the price needs to quickly get back above the 20 DMA as a minimum, and then move beyond the 1422 high from Thursday night.

June is historically a very weak month for gold, with the June to August period often referred to as the "summer doldrums". In the past, the price tended to drift along and sell off steadily all summer at worst.

Equities tumbled on Friday, which should have been bullish for gold. It is worrying that yellow metal didn't respond more positively to the sell off in stocks. The S&P is expected to test 1600 before continuing its recent strong performance.

The dollar arrested its recent decline at the support area around 83, whilst oil tumbled below $92 a barrel. Both markets contributed to the selloff in gold.

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