Gold futures have closed below $1,300 every session since May 15 with traders taking in the S&P 500 closing above 1,900 for the first time, even through economic data indicate continued struggles and geopolitical tensions remain ongoing. Gold-backed exchange-traded products, such as the SPDR Gold Trust (GLD) have seen a decline in bullion holding, whilst platinum- and palladium-backed funds hit records. Nevertheless, gold still remains a top performer in 20014, up 7.6 percent versus the S&P 500 gaining 3.7 percent.
“Trading is expected to be lackluster with the U.S. holiday, with no economic data to look forward to. Ukraine continues to offer background support,” said Zhu Siguan, analyst at GF Futures Co.
The GLD, the largest exchange-traded product backed by bullion, remains at support; but, there is little incentive to see a pickup in demand. Physical bullion holdings by the fund remain steady at 776.89 metric tons.
Price action is being supported at $124.03, the 50 percent retracement level since the decline from $133.69 on Ukraine-linked tensions. There is virtually no momentum, which is leading price into range bound territory. If demand at these levels breakdown, the GLD would retest $123 before attempting to reach $121.81, or the 61.8 percent retracement level. Upward movement is likely to be held at $125, meeting both the 50 and 72 EMA.