Gold Price Futures (GC) Technical Analysis – Consolidating; Strengthens Over $1744.30, Weakens Under $1711.70

Gold futures are inching lower early Friday, basically mirroring the price action in the June 10-year U.S. Treasury note futures contract and the June U.S. Dollar Index futures contract. These are the two factors driving the direction of bullion at this time. Fundamentally, the catalyst behind the early move and yesterday’s steep sell-off is the U.S. Federal Reserve’s forecast of a strong economic rebound.

At 05:49 GMT, April Comex gold is trading $1732.30, down $0.20 or -0.01%.

On Thursday gold reversed early gains as yields jumped as the Federal Open Market Committee (FOMC) pledged  after its mid-week policy meeting to press on with aggressive monetary stimulus, saying a near-term spike in inflation would prove temporary amid their projections for the strongest U.S. economic growth in nearly 40 years.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1673.30 will signal a resumption of the downtrend. The main trend will change to up on a trade through $1815.20.

A trade through $1716.60 will turn $1754.20 into a new main top.

The minor trend is also down. The minor trend changed to down on Thursday when sellers took out $1722.00. The minor trend will change to up on a move through $1754.20. This will also shift momentum to the upside.

The major support is the long-term Fibonacci level at $1711.70.

The short-term range is $1815.20 to $1673.30. Its 50% level at $1744.30 is potential resistance.

The major resistance is the long-term 50% level at $1787.30.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold market on Friday is likely to be determined by trader reaction to the 50% level at $1744.30 and the Fibonacci level at $1711.70.

Bullish Scenario

A sustained move over $1744.30 will indicate the presence of buyers. The first upside target is $1754.20. Taking out this level could trigger an acceleration to the upside with $1787.30 the next likely upside target.

Bearish Scenario

A sustained move under $1711.70 will signal the presence of sellers. This could trigger a break into the minor bottom at $1696.60, followed by the main bottom at $1673.30.

Side Notes

Rollover to the June Comex Gold futures contract on Monday.

For a look at all of today’s economic events, check out our economic calendar.