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James Hyerczyk
Comex Gold

Gold prices dipped on Friday as investors booked profits ahead of the week-end. A late session sell-off in U.S. equity markets also weighed on prices due to margin call pressure concerns.

Gold has been locked on U.S. equities for almost a month despite some calling it a safe-haven asset. Although gold outperformed stocks on Friday, for the week, the Dow closed 11.18% higher while gold finished up 11.16%.

On Friday, June Comex gold settled at $1654.10, down $6.20 or -0.37%.

Daily Technical Analysis

The main trend is down according to the swing chart, however, momentum is trending higher. The main trend will change to up on a trade through $1707.80. A trade through $1453.00 will signal a resumption of the downtrend.

Due to last week’s spectacular rally, many want to say gold is in an uptrend. However, this is not the case. An uptrend is formed by a series of higher tops and higher bottoms. Where is the higher top?

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

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

Daily June Comex Gold

Short-Term Outlook

The upper or Fibonacci level at $1610.50 stopped the selling last Wednesday and Thursday. Additionally, the market traded well above this level on Friday.

This is the level to watch next week. Holding above it will indicate that buyers are coming in to support the market even at elevated price levels.

If sellers can take out $1610.50 and sustain the break then look for an eventual move into the 50% level at $1580.40. This is the trigger point for an acceleration to the downside.

Short-term bullish traders should keep an eye on the price action at $1610.50. Long-term bullish traders need to watch the price action and read the order flow at $1580.40.

Look out to the downside if $1580.40 fails as support.

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