Gold Price Outlook: Can Bearish Technical Setup and June Weakness Align?

Over the past few weeks, I’ve noted that gold’s almighty rally is showing signs of exhaustion on the higher timeframes. Not only has price action delivered several twists and turns since its latest all-time high (ATH) in April, but the weekly charts show overlapping candles, and a Rickshaw Man doji formed on the monthly chart in May.

Moreover, May marked the first month since November that bulls failed to push gold prices above the prior month’s high. While none of this guarantees a strong bearish reversal, it does at least signal a clear change in the character of price action compared with the almost parabolic rally seen since January.

Only time will tell whether bears will be treated to a larger decline or simply lulled into another bear trap. But for now, a near-term bearish setup may have surfaced on gold’s daily chart to keep them occupied.

View related analysis:

Gold Bearish Reversal Pattern Forms Near May High

A two-bar bearish reversal pattern (dark cloud cover) has formed on the gold daily chart, signalling a potential swing high for gold prices. That it occurred at the May high adds further weight to the case for at least a minor pullback — potentially toward the $3,313 support level.

The potential for a larger gold price correction, such as a double zig-zag, remains in play while gold holds beneath the May high. This corrective pattern implies another ABC move lower, which brings the $3,000–$3,031 support zone into focus. However, such a deeper retracement would likely require a strong risk-on environment. For now, the bias remains for a pullback toward $3,313, with the outlook to be refined as gold market conditions evolve.

Gold Futures Eye Support Near $3,340–$3,355 on 1-Hour Chart

The 1-hour chart shows gold is attempting to carve out a swing low above $3,400, currently trading around its weekly pivot point. The RSI (14) has rebounded from oversold territory and formed a small bullish divergence, suggesting that a minor bounce may be due.

Gold bears could look to fade into minor moves within Tuesday’s range, maintaining a bearish bias while prices remain beneath Monday’s high. Note that the weekly S1 pivot at $3,354.70 aligns just above two high-volume nodes (HVNs), making the $3,340–$3,355 zone a potential near-term support level — just above the key $3,313 swing low.

Gold June Seasonality Shows Lowest Win Rate of the Year

It is also worth noting Gold has averaged the strongest negative monthly return in June, using futures data over the past 43 years. Gold has also closed lower 60.5% of the time in June which is the lowest win rate of 39.5% compared to any other month in the year.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.