Gold Price Futures (GC) Technical Analysis – May Have Established Support Base at $1272.70 to $1267.30Based on the earlier price action and the current price at $1284.90, the direction of the June Comex gold futures contract the rest of the session is likely to be determined by trader reaction to the short-term 50% level at $1286.60.
Gold futures are up nearly 1 percent late Thursday after hitting a low at $1269.00 earlier in the week inside a longer-term retracement zone and slightly above the $1267.30 main bottom. The market received a boost from a combination of lower Treasury yields, a drop in demand for risky assets and a reversal to the downside by the U.S. Dollar.
At 18:40 GMT, June Comex Gold is trading $1284.90, up $10.70 or +0.84%.
The price action on Thursday is critical because it confirms what I’ve been saying for weeks, gold needs lower rates, a weaker dollar and a plunge in demand for stocks to generate any upside momentum since it is an investment and not a safe-haven asset. Something has to happen in the other asset classes to make gold a more attractive investment.
Daily Swing Chart Technical Analysis
The main trend is actually up according to the daily swing chart, however, momentum has been trending lower since the formation of a closing price reversal top at $1304.20 on May 14.
A trade through $1267.30 will change the main trend to down. A move through $1304.20 will signal a resumption of the uptrend.
Gold is currently surrounded by a pair of major retracement zones. On the downside, the support zone is $1272.70 to $1253.00. On the upside, the resistance area is $1299.80 to $1325.90. This areas are controlling the longer-term direction of gold.
The short-term range is $1304.20 to $1269.00. Its retracement zone is $1286.60 to $1290.70. The lower or 50% level at $1286.60 provided resistance earlier on Thursday at $1287.10.
Additional resistance or a pivot level is last year’s close at $1294.20.
Daily Swing Chart Technical Forecast
Based on the earlier price action and the current price at $1284.90, the direction of the June Comex gold futures contract the rest of the session is likely to be determined by trader reaction to the short-term 50% level at $1286.60.
A sustained move over $1286.60 will indicate the presence of buyers. This could trigger a rally into the short-term Fibonacci level at $1290.70 and the December 31, 2018 main close at $1294.20. Overcoming these level will indicate the buying is getting stronger.
Look for a surge to the upside if $1294.20 is taken out. This could drive the gold market into $1299.80 then $1304.20. Taking out $1304.20 will negate the closing price reversal top and signal a resumption of the uptrend. This is a potential trigger point for an acceleration to the upside with $1325.90 the target.
A sustained move under $1272.70 will indicate the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into $1272.70, followed by $1269.00 and $1267.30.
Gold seems to be developing a support base between $1267.30 and $1272.70, but it has to overcome the retracement zone at $1286.60 to $1290.70 to generate some upside excitement. Otherwise, a secondary lower top will form inside this zone and the downtrend will eventually resume.
Rolling to August Comex Gold on Friday.