Photo by Dmitry Demidko on Unsplash

Gold markets bounced ever so slightly toward the end of the month, and it now looks like we will continue to see a lot of volatility. It is worth paying close attention to the $1800 level because it has been a critical one multiple times in the past. That being said, we could go much lower, and if we break down below the lows of the month, there is not a lot to keep this market from dropping down to the $1700 level.

The $1900 level above will continue to be a significant issue to deal with, and if we can break above that point, then it is likely that we could reach the $2000 level. That obviously would be a big move, and I think that may be asking a lot out of the month of June.

June does tend to be a little bit quiet, so there is also the possibility that we will spend quite a bit of the month simply consolidating. This is my base case scenario, currently.

The market has sold off quite drastically, so it is not inconceivable that we would go sideways to stabilize and then perhaps become comfortable with the idea of buying gold again. After all, unless something dramatic happens, it is doubtful that we would see this market simply take off during the month of June.

On the downside, if we were to break down below the $1700 level, that would be practically catastrophic. However, that is not very likely to happen without a significant spike in the US dollar. More likely than not, the market will continue to ping around the $1800 level, give or take $50 occasionally. The volume and participation in June tend to be a bit weak historically, so I would not be surprised to see a back-and-forth type of range.

Pay close attention to the US bond yields because if we continue to see them elevated, that would work against the value of gold. On the other hand, if we see yields fall suddenly, then owning gold becomes a bit more palatable. I think we are going to have a very quiet couple of months, as we are simply back to where we started from the most recent rally.