Gold retreats further as the positive drive above $2,400 wanes

The precious metal is down 1% on the day now to $2,355 and is already retracing back half of the rebound from earlier this month. It’s not just gold that is seeing a modest pullback in trading this week. Metals in general are seeing a similar mood, with copper in particular having seen its worst day since the pandemic as noted here.

In the case of gold, the near-term bias has turned more bearish on drops below its key hourly moving averages. Adding to that now is the pullback also breaching the 50.0 Fib retracement level of the swing higher this month at $2,363. There is some light support from the 13 May low around $2,332 to $2,336 next. But considering the nature of the pullback, we could see it extend back towards the early May lows close to $2,277 to $2,285.

And as argued earlier, we are overdue a notable pullback/correction in the commodities space after the surging run since March.

But from a structural perspective, the dips here will make for better buying opportunities in the longer run again. But patience and timing will be key in determining that. For now, it looks like the pullback still has some legs to run.

This article was written by Justin Low at www.forexlive.com.