Gold is behaving pretty well today considering the size of the selloff taking place in U. S. equities markets. It seems the pullback in the S&P has already been factored into gold during the precious metal's rapid decline in June.

Gold is holding onto June lows with the EUR/USD and GBP/USD fighting to keep their respective technical supports intact. Though gold reacted negatively to the discouraging unemployment data out of the U. S., volume has been under control. However, we will have to see how the 16:00 bar on the 4-hour fares volatility wise, and whether the precious metal chooses to retest June lows.

The technical key to the downside will be our 1st tier uptrend line. Below here, gold has June lows and naturally the highly psychological $900/oz level. Due to the July 4th holiday-shortened week, investors may not have enough ammo to send the S&P futures tumbling below their June lows.

Gold would need a technical statement to the downside such as this for the precious metal to compromise its own June lows. Gold will likely take its cue from the S&P and its behavior between 875-900. Therefore, investors should keep a close eye on U. S. equities and their reaction to upcoming 2nd quarter earnings reports.

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