Gold Price Futures (GC) Technical Analysis – Close Under $1756.30 Forms Closing Price Reversal Top

Gold futures are trading lower shortly after the New York opening on Monday after surging to its highest level since October 2012 earlier in the session. The U.S. Dollar is also edging lower which makes me suspect the weakness in gold is being fueled by profit-taking due to rapidly increasing demand for risky assets.

At 13:09 GMT, June Comex gold is trading $1754.60, down $1.70 or -0.10%. This is down from an intraday high of $1775.80.

Gold traders should note that futures contracts tied to the major U.S. stock indexes are up sharply shortly before the cash market opening on Monday. One catalyst beyond the strength is news from Moderna, which stoked optimism about a potential coronavirus vaccine.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was confirmed earlier today when buyers took out Friday’s high. A trade through the last swing bottom at $1676.00 will change the main trend to down.

The minor trend is also up. A trade through $1692.10 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is $1788.80 to $1666.20. Its 50% level at $1727.50 is the primary downside target and potential support level since the trend is up.

The main range is $1576.00 to $1788.80. Its retracement zone at $1682.40 to $1657.30 is the major support.

Daily Swing Chart Technical Forecast

Based on the early price and the current price at $1754.60, the direction of the June Comex gold market the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at $1756.30.

Bullish Scenario

A sustained move over $1756.30 will signal the presence of buyers. If this is able to create enough upside momentum then we could see a retest of the intraday high at $1755.80. This is a potential trigger point for an acceleration into the April 14 top at $1788.80.

Bearish Scenario

A sustained move under $1756.30 will indicate the presence of sellers. This will also put the market in a position to form a potentially bearish closing price reversal top.

A close under $1756.30 will form the chart pattern. If confirmed on Tuesday, then look for the start of a 2 to 3 day correction. The first downside target would be the 50% level at $1727.50, followed by another short-term 50% level at $1725.90.

A closing price reversal top represents a shift in momentum. It does not signal a change in trend. It could eventually lead to a change in trend, but right now it just means the selling is greater than the buying at current price levels.