June Gold is under pressure this morning after taking out uptrending Gann angle at $1660.60 and a swing bottom at $1646.70. In addition, the metal also broke through the March 22 bottom at $1629.80, setting up the market for a possible acceleration to the downside.
With the trend decisively lower and downside momentum building, expectations are for June Gold to continue to weaken into an uptrending Gann angle at $1594.60.
The catalyst behind this morning’s weakness is the stronger U.S. dollar. On Tuesday, the U.S. Federal Reserve minutes lit a fire under the dollar when they revealed that chances of additional quantitative easing have been diminished. Simply stated, a stronger dollar means weaker commodities including gold.
Trend traders are expected to continue to push this market lower as long as the lower-top, lower-bottom remains intact. Counter-trend traders may begin bottom picking if the Gann angle at $1594.60 is tested.