Gold Price Futures (GC) Technical Analysis – Main Trend Up, but Momentum has Shifted to Downside

Gold futures are trading lower late in the session on Thursday as U.S. Treasury yields jumped following the release of an upbeat report on the U.S. economy.

Treasury yields reversed yesterday’s weakness early in the session after U.S. President Joe Biden’s proposal of trillions of dollars in new spending and data showing U.S. economic growth accelerated in the first quarter. Higher yields increase the opportunity cost for holding non-yielding bullion.

At 19:20 GMT, June Comex gold futures are trading $1772.50, down $1.40 or -0.08%.

Yields surged and gold prices plunged shortly after the regular session opening after a government report showed economic activity surged to start 2021. The U.S. Commerce Department said first-quarter gross domestic product rose 6.4%, compared to the 6.5% expected by economists polled by Dow Jones.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has shifted to the downside. A move through $1798.40 will signal a resumption of the uptrend. The main trend will change to down on a move through $1723.20.

The minor trend is down. This is controlling the momentum. A trade through $1789.90 will change the minor trend to up. A move through $1754.60 will indicate the selling pressure is getting stronger.

The major resistance is a long-term 50% level at $1788.50.

The minor range is $1798.40 to $1754.60. The market straddled its 50% level at $1776.50 throughout the session and is currently trading on its weak side.

The first short-term range is $1723.20 to $1798.40. Its 50% level at $1760.80 is potential support.

The second short-term range is $1677.30 to $1798.40. Its 50% level at $1737.90 is potential support.

The major support is the long-term Fibonacci level at $1677.30.

Short-Term Outlook

The key resistance level is still $1788.50. Continue to look for a downside bias as long as gold remains under this level.

Short-term, the key level is the minor pivot at $1776.50. A sustained move under this level will indicate the presence of sellers. This could trigger another hard break into $1760.80.

A sustained move under $1760.80 will indicate the selling is getting stronger. This could trigger a further decline into another short-term 50% level at $1737.90.

On the upside, a sustained move over $1788.50 will be a bullish sign. The daily chart indicates there is plenty of room to the upside over this level with the February 10 main top at $1858.90 the next major upside target.

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