Gold Price Futures (GC) Technical Analysis – Look for Downside Bias on Sustained Move Under $1737.50

Gold futures are edging lower at the start of the week as the U.S. Dollar continues to hover just below multi-month highs. Elevated bond yields and an improving economic outlook are putting further pressure on the precious metal.

Early Monday, U.S. Treasury yields held close to one-year highs reached on March 18, while the dollar began the week firmly as U.S. economic strength and a smooth, fast-paced vaccine rollout, made the U.S. Dollar a more attractive investment.

At 09:00 GMT, June Comex gold futures are trading $1725.00, down $9.70 or -0.56%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1676.20 will signal a resumption of the downtrend. The main trend will change to up on a move through $1817.60.

The minor trend is also down. A trade through $1719.10 will signal a resumption of the downtrend. The minor trend will change to up on a move through $1756.00. This will shift momentum to the upside.

On the downside, the first support is a long-term Fibonacci level at $1711.90, this is followed by a short-term Fibonacci level at $1706.70.

The minor range is $1756.00 to $1719.10. Its 50% level at $1737.50 is resistance.

The short-term range is $1817.60 to $1676.20. Its retracement zone at $1746.90 to $1763.60 is also resistance. This area is controlling the near-term direction of the market.

The major resistance is a long-term Fibonacci level at $1788.50.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold market on Monday is likely to be determined by trader reaction to $1737.50.

Bearish Scenario

A sustained move under $1737.50 will indicate the presence of sellers. This could create the downside momentum needed to challenge $1719.10, followed by a pair of Fibonacci levels at $1711.90 and $1706.70. The latter is a potential trigger point for an acceleration to the downside.

Bullish Scenario

Overtaking and sustaining a rally over $1737.50 will signal the presence of buyers. This could lead to a labored rally with potential targets $1746.90, $1756.00 and $1763.60. The latter is the trigger point for a possible acceleration to the upside with $1788.50 the next major upside target.

Since the main trend is down, sellers are likely to come in on each test of resistance. This is why we expect the rally to be labored.