Gold Price Futures (GC) Technical Analysis – Main Trend is Up, But Momentum Has Shifted to Downside
Gold futures are trading lower early Wednesday, pressured by firmer U.S. Treasury yields as investors await the Fed’s interest rate and monetary policy decisions, due to be released at 18:00 GMT. The benchmark U.S. 10-year Treasury yield rose to their highest since April 15, increasing the opportunity cost of holding non-yielding bullion.
At 03:22 GMT, June Comex gold is trading $1770.70, down $8.10 or -0.46%.
In other news, analysts and traders have slashed their gold price forecasts, with many believing a return to last year’s record highs is unlikely as economic recovery tarnishes the safe-haven metal’s appeal, a Reuters poll showed on Tuesday.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through $1798.40 will signal a resumption of the uptrend. A move through $1723.20 will change the main trend to down.
The minor trend is down. This is controlling the momentum. The new minor top is $1785.90. Taking out this level will change the minor trend to up and shift momentum to the upside.
On the upside, the resistance is a minor pivot at $1781.00 and a major long-term 50% level at $1788.50.
On the downside, the nearest support is a minor 50% level at $1760.80.
The short-term range is $1677.30 to $1798.40. Its 50% level at $1737.90 is the last potential support before the main bottom.
The major support is a long-term Fibonacci level at $1711.90.
Daily Swing Chart Technical Forecast
June Comex gold is currently trading inside a pair of 50% levels at $1781.00 and $1760.80.
A sustained move under $1760.80 will indicate the presence of sellers. This is also a potential trigger point for an acceleration to the downside with $1737.90 the next potential downside target. Since the main trend is up, buyers are likely to come in on the first test of this level.
If $1737.90 fails as support then look for a test of the main bottom at $1723.20. Taking out this level will change the main trend to down and likely lead to an eventual test of the major Fibonacci level at $1711.90.
A sustained move over $1781.00 will signal the presence of buyers. This could lead to a labored rally with the first two targets coming in at $1785.90 and $1788.50.
Overcoming $1788.50 will put gold on the strong side of a long-term 50%. This could trigger a surge into the main top at $1798.40. Taking out this level will reaffirm the uptrend and could trigger an acceleration into the next main top at $1817.60.
For a look at all of today’s economic events, check out our economic calendar.