Based on the early price action, the direction of the June Comex gold market on Friday is likely to be determined by trader reaction to the downtrending Gann angle at $1294.80.
Gold futures are trading lower after posting a two-sided trade earlier in the session. Volume is light ahead of the release of the U.S. Non-Farm Payrolls report at 12:30 GMT. Today’s early inside move indicates investor indecision and impending volatility. This can be expected due to the importance of the jobs report.
At 11:50 GMT, June Comex gold is trading $1291.90, down $2.40 or -0.19%.
Gold futures are being pressured by a stronger U.S. Dollar, rising interest rates and increasing appetite for higher risk assets. As far as the Non-Farm Payrolls report is concerned. Here’s what investors are expecting. The Non-Farm Employment Change is expected to show the economy added 172,000 jobs in March. The Unemployment Rate is expected to remain at 3.8%. Average Hourly Earnings are expected to have risen by 0.3% for the month.
An overall bullish report should drive gold prices lower.
The main trend is down according to the daily swing chart. A trade through $1284.90 will indicate the selling is getting stronger. The main trend will change to up on a move through $1330.80, but this isn’t likely to occur. However, investors should watch for a closing price reversal bottom.
The minor trend is also down. A trade through $1299.00 will change the minor trend to up. This should shift momentum to the upside. A move through $1284.90 will signal a resumption of the minor downtrend.
On the downside, the nearest support is a pair of retracement levels at $1289.90 and $1285.50.
On the upside is a series of resistance levels at $1302.50, $1307.90 and $1313.30.
Based on the early price action, the direction of the June Comex gold market on Friday is likely to be determined by trader reaction to the downtrending Gann angle at $1294.80.
A sustained move over $1294.80 will indicate the presence of buyers. If this generates enough momentum then look for buyers to go after $1299.00 then $1302.50.
Taking out $1302.50 could create the momentum needed to challenge $1307.90. Prices should continue to accelerate to the upside with the next target a resistance cluster at $1312.80 to $1313.30.
A sustained move under $1294.80 will signal the presence of sellers. The first target is $1289.90, followed by a potential support cluster at $1285.50 to $1284.90.
Watch the price action and read the order flow at $1284.90 today because if it fails, we could see an acceleration to the downside with $1268.90 the next major downside target.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.