Gold Price Futures (GC) Technical Analysis – Plenty of Room to Upside on Breakout Over $1744.30

Gold futures are edging higher late in the session on Monday as counter-trend traders continue to build a support base. The fundamentals are mixed during today’s session, the U.S. Dollar is up and Treasury yields are easing. But it’s a small sample so we’ll chalk up the moves as position-squaring ahead of the start of the Fed’s two-day meeting on Tuesday.

At 19:47 GMT, April Comex gold futures are trading $1729.70, up $9.90 or +0.58%.

The price action also suggests that aggressive investors could be hedging their bets ahead of the Fed announcements on Wednesday. Although rising rates are likely to keep a lid on gold prices, there is always the possibility that economic growth will stall especially if the U.S. gets hit by a second wave of coronavirus or inflation takes off faster than expected.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1673.30 will signal a resumption of the downtrend. The main trend will change to up when buyers take out the last swing top at $1815.20.

The minor trend is also down. A trade through $1738.00 will change the minor trend to up. This will also shift momentum to the upside. A trade through $1696.60 will indicate that sellers have returned.

The minor range is $1673.30 to $1738.00. Its 50% level at $1705.70 is potential support.

The market is also trading inside a major retracement zone at $1711.70 to $1787.30. This zone is controlling the longer-term direction of the market.

The short-term range is $1815.20 to $1673.30. Its 50% level at $1744.30 is the next upside target and potential resistance.

Daily Swing Chart Technical Forecast

Look for the upside momentum to continue as long as the market can hold above $1711.70. A downside bias could re-emerge if sellers can take out $1705.70.

Traders should watch the price action and read the order flow on a test of the potential resistance cluster at $1738.00, $1739.10 and $1744.30.

A trade through $1738.00 changes the minor trend to up. A move through $1739.10 will reaffirm the move and taking out $1744.30 could trigger an acceleration to the upside with $1787.30 the next likely upside target.