Gold Price Futures (GC) Technical Analysis – Needs to Overcome $1655.10 to Regain Strength

Gold futures are trading lower on Tuesday at the mid-session. Profit-takers drove the market lower from the opening then aggressive value-seekers came in to stop the price slide and recapture some of today’s losses.  I wouldn’t call gold “overbought”, but I will say it was overpriced, drawing the attention of sellers.

Nonetheless, the fundamentals are bullish and the trend is up, so smart traders did what they were supposed to do, they bought the dip. Now the low of the day may not have been in the best value area, but it was close enough to our value zone to bring in the buyers.

At 16:30 GMT, April Comex gold futures are trading $1652.30, down $24.30 or -1.45%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1691.70 will signal a resumption of the uptrend. The main trend will change to down if the selling is strong enough to take out the previous main bottom at $1564.40.

The short-term range is $1564.40 to $1691.70. Its retracement zone at $1628.10 to $1613.00 is the first downside target and value zone. Since the trend is up, I’m looking for buyers to show up on a test of this zone.

The minor range is yesterday’s high at $1691.70 to today’s low at $1635.10. This makes its 50% level or pivot at $1663.40 a key intraday level to watch. The market could change direction later today if buyers can overcome this level.

Daily Technical Forecast

Based on the early price action and the current price at $1652.30, the direction of the April Comex gold futures contract the rest of the session of Tuesday is likely to be determined by trader reaction to the steep uptrending Gann angle at $1655.10.

Bullish Scenario

A sustained move over $1655.10 will indicate the presence of buyers. The first upside target is the pivot at $1663.40. Overcoming this level will indicate the buying is getting stronger. This could lead to a test of $1691.70 and a resumption of the uptrend.

Bearish Scenario

A sustained move under $1655.10 will signal the presence of sellers. The first downside target is a support cluster at $1628.40 to $1628.10. Look for buyers on the first test of this area.

If $1628.10 fails then look for the selling to possibly extend into the Fibonacci level at $1613.00.