Gold Price Futures (GC) Technical Analysis – Major Support Zone is $1575.10 to $1547.60

A relative calm in the U.S. equity markets is helping to support higher gold prices on Monday, following a steep sell-off the previous session. On Friday, gold plunged as professionals sold the precious metal to raise cash to meet margin calls and to cover steep losses from the massive stock market correction.

At 15:17 GMT, April Comex gold is trading $1599.80, up $33.10 or +2.11%.

Today, gold buyers are returning, driven by weakness in the U.S. Dollar, which tends to drive up demand for dollar-denominated gold, and another drop in U.S. Treasury yields. Furthermore, gold traders are betting on a rate cut by the Fed at its regularly scheduled meeting on March 17-18. Lower rates make gold a more attractive investment. Additionally, there is chatter that there will be a coordinated rate cut by the major central banks on Wednesday.

Daily Technical Analysis

The main trend is down according to the daily swing chart. It turned down on Friday when sellers took out the swing bottom at $1564.40. The main trend will change to up on a trade through $1691.70.

The main range is $1458.50 to $1691.70. Its retracement zone at $1575.10 to $1547.60 is support. This zone stopped the selling on Friday at $1564.00.

The new short-term range is $1691.70 to $1564.00. Its retracement zone at $1627.90 to $1642.90 is the primary upside target.

Daily Technical Forecast

Based on the early price action and the current price at $1599.80, the direction of the April Comex gold futures contract the rest of the session on Monday is likely to be determined by trader reaction to a pair of Gann angles at $1606.50 and $1611.70.

Bullish Scenario

Taking out and sustaining a rally over $1611.70 will indicate the presence of buyers. This could trigger a surge into the short-term 50% level at $1627.90, followed by the short-term Fibonacci level at $1642.90 and a downtrending Gann angle at $1651.70.

Bearish Scenario

A sustained move under $1606.50 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main 50% level at $1575.10, followed by Friday’s low at $1564.00, another main bottom at $1551.10, a Fibonacci level at $1547.50 and a main bottom at $1542.80.