Gold bulls need this area to break to keep the momentum going

NEW YORK (June 13)  Gold has kicked off the week on a sour note in Asia and Europe falling 0.82% on Monday. That does not mean all hope is lost as there are enough events this week to keep volatility just around the corner. The Fed is expected to raise rates again and the central bank may comment on the recent inflation data that came in higher than expectations. The Fed is increasingly under pressure but the threat of recession is also looming, what can the central bank do to ease concerns?

Looking at the 4-hour gold price chart below, the market has continued to make some not very convincing higher lows and higher highs. The price is heading back to the volume profile point of control. This is marked by the red horizontal line at $1851.7/oz. If there is to be some support there then the bulls may look to the previous wave high that has been marked on the chart as the bullish breakout area.

On the downside, the consolidation low is the one to watch. As there are some key events this week, we can only call out a bear market if the bears take out that zone. Right now it looks unlikely but below that, the main low on the chart stands at $1785/oz and there would need to be a large volume of selling pressure for that to be on the cards.

KITCO