Gold Price Futures (GC) Technical Analysis – Trend Up; Strengthens Over $1590.30, Weakens Under $1581.20

Gold futures had an impressive rally on Friday, closing just below its high of the week. The market also posted a weekly gain as investors took protection ahead of the long U.S. holiday weekend on renewed concerns over the economic impact of the coronavirus.

Investors shrugged off another stellar week in the U.S. equity markets and the U.S. Dollar, suggesting they felt there were enough unknowns about the coronavirus to warrant the placement of protective hedge positions.

On Friday, April Comex gold settled at $1586.90, up $8.10 or +0.51%.

Gold futures were also boosted by concerns over consumer spending after the U.S. Retail Sales report came in unchanged. This news suggested the economy may not be as strong as previously thought.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The main trend changed to up on Thursday when buyers took out the previous main top at $1580.50. The new main bottom is $1564.40. Taking out this level will change the main trend to down.

The main range is $1619.60 to $1542.80. Its retracement zone at $1581.20 to $1590.30 is controlling the near-term direction of the market. Gold closed inside this zone, setting up a potential breakout rally early next week.

The intermediate range is $1542.80 to $1598.50. Its retracement zone at $1570.70 to $1564.10 is support.

Short-Term Outlook

Based on Friday’s close at $1586.90, the direction of the April Comex gold market early next week is likely to be determined by trader reaction to the uptrending Gann angle at $1586.80 and the main retracement zone at $1581.20 to $1590.30.

Bullish Scenario

A sustained move over $1586.80 will indicate the presence of buyers. Overcoming the Fibonacci level at $1590.30 will indicate the buying is getting stronger, while taking out the downtrending Gann angle at $1593.60 could trigger an acceleration to the upside with potential upside targets coming in at $1598.50 then $1606.60.

Bearish Scenario

A sustained move under $1586.80 will signal the presence of sellers. The first downside target is the 50% level at $1581.20. This is a potential trigger point for an acceleration into the 50% level at $1570.70.