Gold Price Futures (GC) Technical Analysis – Major Support Cluster Support at $1580.40 – $1575.40

Gold futures finished lower on Wednesday while posting a choppy two-sided trade. Early in the session, precious metal traders tracked the U.S. Dollar Index, leading to a sharp break.

Shortly after the regular session opening, the market recovered most of those losses after ADP and Moody’s Analytics reported that companies reduced payrolls by 27,000 in early March before the worst of the coronavirus-induced economic freeze.

Later in the session, the market weakened into the close as traders squared positions ahead of Thursday’s U.S. weekly jobless claims report. Traders are pricing in a job loss of about 3.5 million.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the two main tops at $1698.00 and $1707.80 will change the main trend to up. A move through $1453.00 will signal a resumption of the downtrend.

The major support is the retracement zone at $1473.00 to $1417.50. This zone stopped the selling at $1453.00 on March 16.

The main range is $1707.80 to $1453.00. Its retracement zone at $1580.40 to $1610.50 is controlling the near-term direction of the gold market.

The short-term range is $1453.00 to $1698.00. Its retracement zone at $1575.50 to $1546.60 is the next potential downside target and support zone.

Combining the main range and the short-term range creates a key support cluster at $1580.40 to $1575.50. On Wednesday, the selling stopped inside this zone at $1576.00.

Daily Swing Chart Technical Forecast

Based on Wednesday’s price action, we’re going to continue to monitor trader reaction to the support cluster at $1580.40 to $1575.40.

Bullish Scenario

A sustained move over $1580.40 will indicate the presence of buyers. The first upside target is the Fibonacci level at $1610.50. Overcoming this level could trigger an acceleration to the upside with the next target zone at $1637.00 to $1651.40.

Bearish Scenario

A sustained move under $1575.40 will signal the presence of sellers. This could trigger a further break into the Fibonacci level at $1546.60. This is a potential trigger point for an acceleration into the major support area at $1473.00 to $1417.50.