Gold Price Futures (GC) Technical Analysis – Becoming Unglued from Stocks; Is There a Big Buyer in There?

Gold is trading lower on Wednesday in the extended market, but the damage is minimal compared to the loss in the stock market. The inability to match the stock market’s dismal performance could be a sign that buyers are coming in. However, gains are likely being capped by rising Treasury yields and a firmer U.S. Dollar.

At 18:39 GMT, April Comex gold is trading $1491.60, down $34.20 or -2.24%.

With stocks falling off a cliff, we could be seeing margin call related selling in gold, but it could be being gobbled up by aggressive buyers.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1450.90 will signal a resumption of the downtrend. The main trend will change to up on a move through $1704.30.

The major range is $1232.20 to $1704.30. Its retracement zone at $1468.30 to $1412.30 is support. This zone stopped the selling on March 16 at $1450.90. The retracement zone is controlling the longer-term direction of the gold market.

Daily Technical Forecast

Based on the early price action and the current price at $1491.60, the direction of the April Comex gold market into the extended close on Wednesday is likely to be determined by trader reaction to the major 50% level at $1468.30.

Bullish Scenario

A sustained move over $1468.30 will indicate the presence of buyers. If this move is able to generate enough upside momentum, then look for a possible rally into the short-term retracement zone at $1577.60 to $1607.50.

Bearish Scenario

A sustained move under $1468.30 will signal the presence of sellers. The next three downside targets are a low at $1450.90, an uptrending Gann angle at $1431.10 and the major Fibonacci level at $1412.50.

The Fib level is the trigger point for another acceleration to the downside.

Side Notes

Traders may be seeing value in gold at current price levels. Traders don’t appear to be locked onto the stock market, which may be an early sign that speculative buyers are returning.