Gold Daily Analysis – July 5, 2017

After a spiky drop on Tuesday, Gold prices bounced back against the sensitive geopolitical risk after the announcement by North Korea regarding its successful test fired an intercontinental ballistic missile which landed in the Sea of Japan.

It was a violation of UN resolutions according to the protest made by Tokyo.

The timing of the launch is significant, just days before leaders from the Group of 20 nations are due to discuss steps to curtail North Korea’s weapons programs.

Traders may note today’s economic event – Wednesday, July 5, 2017

1. FOMC Meeting Minutes : (GMT 23:30 LOCAL 11:30 PM)

The minutes offer detailed insights regarding the FOMC’s stance on monetary policy, so currency traders carefully examine them for clues regarding the outcome of future interest rate decisions.

Technical Outlook

Gold prices are consolidating and bouncing to previous support which has become resistance at $1240. This is for the reason that large players did not participate due to Us independence holiday and as the previous low Long red candle did not break, it is treated as short covering trade which will be retraced to reach $1233-$1240 levels. To be precise, it’s not going to be an intricate trading.

I would like you to view it as a small counter trend trade. Even though the decline is not over yet, we will have a bounce here because of profit booking or short covering mode. I would suggest you to make use of this opportunity.

Gold current trend holds negative momentum as the RSI (relative strength index) moved lower with price action reflecting negative momentum. Bullions are under seller’s control which is expected to reach short term target which is $1210 Resistance is seen at $1240 which will be a selling opportunity as downside is expected.