Comex Gold (GC)
Expiring today, crude oil for July delivery slips to 68.4 in European morning as strength in USD, huge supply in motor fuel and downgrade in economic forecasts fueled worries about demand growth outlook. Increased tensions in Nigeria and Iran failed to support price. The most actively traded August contract plunges -1.7% to 68.7.The dollar rises to 1.385 against the euro after the World Banks said economy will contract by almost -3% this year.US Treasury yields also surge as led by 10-year notes. The government will auction $104B of 2-year, 5-year and 7-securities this week.
Gold's fall from 992.1 resumes today and reaches as low as 920.7 so far and further decline is still expected as long as 944.6 resistance holds. Next target will be 61.8% retracement of 865.5 to 992.1 at 913.9 and break there will bring retest of 865.6 low. On the upside, above 944.6 will suggest that fall from 922.1 has completed and will flip bias back to the upside for retesting this level.
In the bigger picture, recent development argues that rise from 865 has completed at 992.1 already, ahead of 1007.7/1033.9 key resistance zone. Also it suggests that consolidation from 1007.7 is still in progress and break of 913.9 fibo support will bring the third leg down to test 865 support before completing the whole consolidation. Nevertheless, downside is expected to be contained by 801.5 cluster support (61.8% retracement of 681 to 1007.7 at 805.7 ) and bring resumption of rise from 681. On the upside, though, above 992.1 will revive the case that rise from 865 is resumption of up trend rather than part of sideway consolidation. In such case, retest of 1007.7/1033.9 resistance should be seen next.
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