Gold Price Futures (GC) Technical Analysis – In Position to Post Daily Closing Price Reversal Bottom

Gold futures are trading higher on Thursday after reversing earlier weakness. The move is possibly being fueled by a number of factors including position-squaring and profit-taking ahead of the long Easter holiday week-end, a drop in U.S. Treasury yields, or renewed concerns over the global economy in response to weaker-than-expected Euro Zone economic data.

At 14:10 GMT, June Comex gold futures are trading $1277.60, up $0.80 or +0.06%.

Volume is well-below average so be careful buying strength and trading weakness. It’s easy to get trapped on the wrong side of the market given today’s trading conditions.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session, but the rebound rally has put it in a position to post a closing price reversal bottom.

A trade through $1273.00 will signal a resumption of the downtrend. The market is in no position to change the trend to up, but do to the prolonged move down in terms of price and time, it is inside the window of time for a closing price reversal bottom. If formed and confirmed, this could trigger a 2 to 3 day counter-trend rally.

The market is currently trading inside a major retracement zone at $1285.50 to $1268.90. This zone is controlling the longer-term direction of the market.

Daily Technical Forecast

Based on the early price action and the current price at $1277.60, the direction of the June Comex gold market the rest of the session is likely to be determined by trader reaction to yesterday’s close at $1276.80.

Bullish Scenario

A sustained move over $1276.80 will indicate the presence of buyers. If this move creates enough upside momentum then look for a closing price reversal bottom to form. It could also trigger a short-covering rally into $1285.50.

Bearish Scenario

A sustained move under $1276.80 will signal the presence of sellers. This could lead to a retest of today’s intraday low at $1273.00. If this fails then look for the selling to extend into the major Fibonacci level at $1268.90.