Gold Price Futures (GC) Technical Analysis – April 25, 2018 Forecast

A strong recovery in the U.S. Dollar is putting pressure on gold prices shortly before the New York opening. The selling pressure has erased all of yesterday’s gains, putting the futures contract in a position to take out yesterday’s low.

At 1139 GMT, June Comex Gold futures are trading $1322.90, down 10.20, or -0.75%.

Gold is also being pressured by a rise in the benchmark 10-year Treasury yield above 3 percent, expectations for further rate increases by the Fed and the anticipation of higher inflation.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been to the downside since the formation of the top at $1369.40 on April 11.

A trade through $1322.60 will change the trend to down. This could trigger a further break into bottoms at $1312.40 and $1309.30.

Yesterday’s closing price reversal bottom at $1323.60 was never confirmed so momentum never shifted back to the upside. Furthermore, the move was negated when this low was taken out today.

The primary downside target is a long-term 50% level at $1311.40. The daily chart indicates there is plenty of room under this level with the Fibonacci level at $1296.20 the next major target.

Daily Technical Forecast

Based on the early trade, the direction of the gold market the rest of the session will be determined by trader reaction to the main bottom at $1322.60.

Sellers took out $1322.60 just a short while ago so the trend changed to down. If the selling pressure increases then we could see a drive into the main bottom at $1312.40, the major 50% level at $1311.40 and the main bottom at $1309.30. This price is the trigger point for an acceleration into $1296.20 over the near-term.

Recovering $1322.60 and sustaining the move will indicate that the selling pressure is weakening. This could trigger a short-covering rally. If the move generates enough upside momentum then we could see a test of a downtrending Gann angle at $1329.40.

The angle at $1329.40 has been guiding the market lower for 10 sessions. Overtaking it will shift momentum to the upside.