Gold Price Futures (GC) Technical Analysis – Pivot at $1296.20 Controlling Short-Term Direction
Gold futures are trading higher on Tuesday, but since the initial surge to the upside, the market has been rangebound. The price action is mirroring the movement in the U.S. Dollar against a basket of currencies. A slight rise in U.S. Treasury yields is also capping gains as well as increased demand for risky assets.
Low volume is contributing to the tight intraday trading range with most of the major players ahead of the Fed interest rate and monetary policy announcements on Wednesday. Traders expect the Fed to remain dovish based on rising expectations of an interest rate cut amid persistent concerns about economic growth in the United States.
At 18:46 GMT, April Comex gold is trading $1307.00, up $5.50 or +0.42%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $1349.80 will change the main trend to up, while a move through $1280.80 will signal a resumption of the downtrend.
The minor trend is up. This move shifted momentum to the upside. A trade through $1292.50 will change the minor trend to down. This will also shift momentum to the downside.
The main range is $1209.30 to $1349.80. Its retracement zone at $1279.60 to $1263.00 is the primary downside target and support.
The intermediate range is $1349.80 to $1280.80. Its retracement zone at $1315.30 to $1323.40 is the primary upside target and resistance. Trader reaction to this zone will determine the direction of the gold market this week.
The short-term range is $1280.80 to $1311.60. Its 50% level or pivot at $1296.20 has been providing support the past two weeks. Currently, the market is trading on the strong side of this pivot, giving it a slight upside bias.
Daily Swing Chart Technical Forecast
Gold has been trading sideways the past five sessions because it is being trapped by a pair of 50% levels at $1296.20 and $1315.30. Furthermore, traders need a catalyst to encourage them to commit to either side of the market.
That catalyst is the U.S. Federal Reserve economic projections. A dovish Fed is likely to trigger the start of a breakout to the upside on a move over $1315.30. Look for a spike to the downside if the Fed is more hawkish than expected and $1296.20 fails as support.