Gold Price Futures (GC) Technical Analysis – Big Test for Buyers This Week at $1581.20 to $1590.30

Gold futures surged on Friday, hitting a more than two-week high in the process as the spread of the coronavirus finally dented risk sentiment enough to drive some investors into gold.

Coronavirus fears had been driving investors out of risky assets and into traditional safe-haven assets like U.S. Treasurys and Japanese Yen all week, but investors tended to shy away from gold as the virus appeared to be contained in China. Buyers finally jumped into gold on Friday when two cases of the coronavirus were reported in the United States.

On Friday, April Comex gold settled at $1578.20, up $6.60 or +0.42%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1542.80 will change the main trend to down. A move through $1619.60 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $1552.10 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $1458.50 to $1619.60. Its retracement zone at $1539.10 to $1520.00 is support.

The short-term range is $1619.60 to $1542.80. Its retracement zone at $1581.20 to $1590.30 is the first upside target. This zone is very important to the short-term structure of the chart pattern. Trader reaction to the zone will determine whether the buyers or sellers are in control.

Aggressive counter-trend sellers could come in to stop the short-term rally. They will be trying to form a secondary lower top. If formed, this could lead to an eventual change in trend.

Trend-trading buyers are going to try to drive the market through $1590.30 in an effort to continue the uptrend.

Short-Term Outlook

The early direction on Monday will be determined by trader reaction to the short-term 50% level at $1581.20.

Taking out this level will mean the buying is getting stronger. This could lead to a test of the Fibonacci level at $1590.30. Overcoming this level could trigger a breakout to the upside.

The inability to overtake $1581.20 will signal the presence of sellers. Crossing to the weak side of a downtrending Gann angle at $1575.80 will indicate the selling is getting stronger with the next target an uptrending Gann angle at $1556.50.

The angle at $1556.50 has to hold as support or the market could plunge into the major retracement zone at $1539.10 to $1520.00.