Scotiabank’s Global FX Strategy team highlights that gold is currently anchored by the technically significant $4500 per ounce support level, which has so far provided clear support in the market [1]. The team warns that a downside break of this level could trigger a sizeable measured move lower, with technical projections indicating a potential drop of approximately $800 per ounce from the $4500 mark [1].
Trading conditions are described as light and volumes thin, attributed to holidays in both the US and UK [1]. Despite this, the broader market tone is bullish, with US equity futures reaching fresh highs and global benchmark oil prices declining by about $5 per barrel on the day [1]. The US dollar is exhibiting broad-based weakness against all G10 currencies, reflecting renewed market confidence in the prospect of a US/Iran deal [1].
In the non-energy commodities space, copper prices are showing renewed strength as they recover from a recent pullback following record highs observed in mid-May [1]. However, for gold, the focus remains on the $4500 support level, as a break below could have significant bearish implications according to Scotiabank’s technical analysis [1].
CONCLUSION
Gold remains supported at the $4500/oz level, but Scotiabank cautions that a break below this threshold could lead to a substantial decline. Market sentiment is generally bullish, with risk appetite evident in equities and a weaker US dollar, but gold traders are closely watching for any technical breakdown.