June Comex gold is currently trading inside a pair of 50% levels at $1781.00 and $1760.80.
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.
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.
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.
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James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.