Gold Price Futures (GC) Technical Analysis – Late Session Weakness Under $1278.20, Strengthens Over $1280.20

Gold futures are plunging on Friday in reaction to surge in the U.S. Dollar, a reversal to the upside in U.S. Treasury yields and increasing demand for higher risk assets.

Safe-haven buying underpinned the U.S. Dollar earlier in the session, capping gold prices. However, prices broke sharply lower after the Dollar jumped in response to stronger sentiment data. Stocks also reversed earlier losses after the U.S. announced it was removing tariffs on automobiles.

Once again “safe-haven” buyers fall victim to the headlines. Watch the price action, read your keys next time.

At 15:44 GMT, June Comex gold futures are trading $1276.30, down $9.90 or -0.76%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at $1304.20 on May 14. A trade through $1304.20 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1267.30 will change the main trend to down.

On the upside, retracement zone resistance comes in at $1299.10 to $1306.50.

The short-term range is $1267.30 to $1304.20. After straddling its retracement zone at $1285.80 to $1281.40 earlier in the session, the market has now crossed to the weak side of this area.

On the downside, the major, long-term retracement zone comes in at $1272.70 to $1253.00. This zone held as support on April 23 at $1267.90 and on May 2 at $1267.30.

Daily Technical Forecast

Based on the early price action and the last price at $1276.30, the direction of the gold market the rest of the session is likely to be determined by trader reaction to a pair of Gann angles at $1278.30 and $1280.20.

Bearish Scenario

A sustained move under $1278.30 will indicate the presence of sellers. This could lead to a test of a potential support cluster at $1272.80 to $1272.70. Watch for a technical bounce on the first test of this area. If $1272.70 fails then look for the selling to extend into the main bottom at $1267.30.

A trade through $1267.30 will change the main trend to down. It could also trigger an acceleration to the downside with the major Fibonacci level at $1253.00 the next potential downside target.

Bullish Scenario

A sustained move over $1280.20 will signal the return of buyers. The next target is the short-term Fibonacci level at $1281.40. This is a potential trigger point for an acceleration into the short-term 50% level at $1285.80, followed by a downtrending Gann angle at $1292.20.