The price range is being controlled by a downtrending Gann angle at $1290.10 and an uptrending Gann angle at $1284.60.
Gold futures are trading higher shortly after the regular session opening, but backing down from its early session high. The market is trading inside yesterday’s range, which suggests investor indecision and impending volatility.
A plunge in U.S. Treasury yields and lower demand for risky assets is helping to underpin prices, but a stronger U.S. Dollar is limiting gains for the dollar-denominated asset.
Despite a somewhat bullish tone, gold prices aren’t likely to mount a strong uptrend until the U.S. Dollar weakens, the stock market crashes or the Fed lowers interest rates.
At 13:47 GMT, August Comex gold is trading $1287.10, up $4.60 or +0.35%.
The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top at $1310.10 on May 14. The main trend will change to down on a trade through $1274.60. It will be reaffirmed by a move through $1273.20. A trade through $1310.10 will signal a resumption of the uptrend.
The major support is the retracement zone at $1280.80 to $1261.70.
The main range is $1310.10 to $1274.60. Its retracement zone at $1292.40 to $1296.60 is resistance. This zone stopped the rally at $1292.50 on May 23.
The minor range is $1274.60 to $1292.50. Its 50% level or pivot is $1283.60. This level is support. It could be controlling the direction of the market today.
The price range is being controlled by a downtrending Gann angle at $1290.10 and an uptrending Gann angle at $1284.60.
A sustained move under $1290.10 will indicate the presence of sellers. A break under $1284.60 will indicate the selling pressure is getting stronger. This should lead to a test of the pivot at $1283.60. If this level fails then look for the selling to possibly extend into the major 50% level at $1280.80, followed closely by the uptrending Gann angle at $1279.60.
Holding the uptrending Gann angle at $1284.60 will signal the presence of buyers. Taking out the downtrending Gann angle at $1290.10 is likely to trigger a breakout to the upside with potential targets the 50% level at $1292.40 and last week’s high at $1292.50. This is a potential trigger point for an acceleration into the Fibonacci level at $1296.60, followed by the downtrending Gann angle at $1300.10.
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.