Gold Price Futures (GC) Technical Analysis – Failure to Hold $1272.70 Could Trigger Plunge into $1253.00

Gold futures finished slightly lower on the last day of trading after a successful test of a long-term retracement level. However, gains remained limited by firmer Treasury yields, steady equity prices and a strengthening U.S. Dollar. The catalyst behind the pressure was better-than-expected U.S. retail sales data. Core Retail Sales rose 1.2%, better than the 0.7% forecast and Retail Sales gained 1.6%, higher than the 0.9% estimate.

On Thursday, June Comex gold futures settled at $1276.00, down $0.80 or -0.06%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1273.00 will signal a resumption of the downtrend. The main trend will change to up on a move through $1314.70. The market is in no position to change the main trend to up, but there is room to the upside for a normal 50% to 61.8% correction. Furthermore, Monday’s session will begin with gold inside the window of time for a potentially bullish closing price reversal bottom.

The major retracement zone support is $1272.70 to $1253.00. On Thursday, sellers came in slightly above the 50% or upper level of this range at $1273.00.

On the upside, the first target is the short-term 50% level at $1293.90, followed by the December 31, 2018 close at $1294.20. This is followed by a major 50% level at $1299.80. Since the main trend is down, sellers are likely to come in on a test of these levels.

Daily Swing Chart Technical Forecast

Based on the close at $1276.00 and last week’s price action, the direction of the June Comex gold market on Monday is likely to be determined by trader reaction to the major 50% level at $1272.70.

Bullish Scenario

A sustained move over $1272.70 will indicate the presence of buyers. If this creates enough upside momentum then we could see an extended rally into $1293.90 to $1294.20.

Bearish Scenario

Taking out $1272.70 will put gold in a bearish position. It will also indicate the selling is getting stronger. If this generates enough downside momentum then look for the selling to possibly extend into the major Fibonacci level at $1253.00.