For scalpers, the key zones to watch today are 2415 and 2430. Gold may have reached a record high on Monday, but with the gold basket hovering below resistance and the USD showing signs of drifting higher, the rally might take a breather or even retrace lower.
It was a mixed start to the week on Wall Street. The Nasdaq 100 closed at a record high, buoyed by anticipation of another strong earnings report from Nvidia (NVDA) due on Wednesday. Meanwhile, the S&P 500 closed flat, unable to break above Thursday’s record high, and the Dow Jones ended the day with a bearish engulfing candle despite hitting an intraday record high earlier.
Gold/USD hit a record high on Monday with increased trading volume, but failed to sustain gains above $2450 and the prior record high, subsequently retracing lower. Constructing an immediate bearish case for gold is challenging, except for its stalling around key resistance levels. This situation calls for caution among gold bulls.
Given the recent false break of the April high for gold futures, bulls might want to see the gold basket break to a new record high before confidently assuming that gold futures will maintain gains. A decisive factor for this bullish scenario would be the US dollar index breaking and holding below 104.
Alternatively, bulls could wait for a retracement to seek evidence of a higher low, presenting a more favorable price for a bullish swing trade in anticipation of a new record high. This strategy ensures that trades are made at more advantageous levels, minimizing risk while maximizing potential gains.
In summary, while gold's recent performance signals strength, traders should be cautious and strategic, especially around key resistance levels and upcoming market events. Scalping within the 2415 to 2430 zones could offer opportunities, provided traders stay alert to market signals and broader economic indicators.