Gold Price Futures (GC) Technical Analysis – Next Upside Target $1337.80, Key Support Level $1319.70

Gold prices continued to press higher on Thursday with the market closing within striking distance of a major June 2018 top on the daily chart. The market continued to be underpinned by the dovish U.S. Federal Reserve announcements from Wednesday in which the central bank left its benchmark interest rate unchanged and said it would be “patient” with future rate hikes. The market also posted its fourth consecutive monthly gain.

At 23:00 GMT, April Comex gold is trading $1325.70, up $0.50 or +0.04%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1331.10 will reaffirm the uptrend. The main trend will change to down on a trade through $1281.50.

Due to the prolonged move up in terms of price and time, traders should start watching for topping action. The best sign will be a higher-high lower close.

The market is currently trading on the bullish side of a major retracement zone at $1319.70 to $1293.60. This zone is controlling the longer-term direction of the market. Holding above this area will continue to give the market an upside bias. This zone is new support.

The new short-term range is $1281.50 to $1331.10. If $1319.70 fails as support then we could see a pullback into its retracement zone at $1306.30 to $1300.40. This zone falls inside the major retracement zone.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold futures contract on Friday will likely be determined by trader reaction to $1331.10.

Bullish Scenario

Taking out $1331.10 and sustaining the move will indicate the buying is getting stronger. This could extend the rally into the June 14, 2018 top at $1137.80. We could see a technical bounce on the first test of this level. However, overtaking it could trigger an acceleration to the upside with the next major target the May 11, 2018 main top at $1356.80.

Bearish Scenario

The inability to take out $1331.10 or sustain a rally over this level will signal the presence of sellers. This could trigger a break into the major Fibonacci level at $1319.70. If this level fails then look for the selling to extend into the short-term retracement zone at $1306.30 to $1300.40. This is followed by the major 50% level at $1293.60.

Closing Price Reversal Top

Today is the sixth session up from the last main bottom, we may be early, but due to the steepness of the current rally, we’re looking for a potentially bearish closing price reversal top. Look for a trade through $1331.10 then a move through yesterday’s close at $1325.20 to signal the selling is greater than the buying at current price levels.