Gold Price Futures (GC) Technical Analysis – Price Action, Order Flow at $1672.80 Sets the Tone

Gold futures are inching higher early Wednesday as traders react to a slight rise in U.S. 10-Year Treasury note yields and a decline in U.S. stock index futures. The catalysts behind the price action are doubts about a stimulus package proposed by U.S. President Donald Trump to soften the economic impact of the coronavirus epidemic and a jump in coronavirus cases in South Korea and the United States.

At 05:29 GMT April Comex gold futures are trading $1663.40, up $3.10 or +0.19%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1704.30 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at $1564.00.

The minor trend is also up. However, on Tuesday, a new minor top was formed at $1704.30.

The minor range is $1704.30 to $1641.30. Its 50% level or pivot is $1672.80. This level could play a role in determining the price action the rest of the session on Wednesday.

The short-term range is $1564.00 to $1704.30. Its retracement zone at $1634.20 to $1617.60 is the first downside target.

The main range is $1458.50 to $1704.30. Its retracement zone at $1581.40 to $1552.40 is major support. The last main bottom at $1564.00 is inside this retracement zone.

Daily Technical Forecast

The direction of the April Comex gold futures contract the rest of the session on Wednesday is likely to be determined by trader reaction to the minor pivot at $1672.80.

Bullish Outlook

Overtaking and sustaining a move over $1672.80 will indicate the presence of buyers. The first upside target is a steep uptrending Gann angle at $1692.00.

Crossing to the strong side of the Gann angle at $1692.00 will put gold in a bullish position. This could lead to an extension of the rally into this week’s high at $1704.30.

A breakout over $1704.30 could drive the market into a major objective at $1729.50.

Bearish Outlook

The inability to overcome $1672.80 will signal the presence of sellers. These are bearish investors hoping to form a secondary lower top. If successful then look for a pullback into the short-term 50% level at $1634.20, a steep uptrending Gann angle at $1628.00, a long-term uptrending Gann angle at $1620.50 and a short-term Fibonacci level at $1617.60.

Since the main trend is up, look for buyers to come in on a test of $1634.20 to $1617.60. They are going to try to form a secondary higher bottom.

The Fib level at $1617.60 is a potential trigger point for an acceleration to the downside with $1581.40 the next major target.

Side Notes

Gold traders are following the movement in the Treasury yields. However, they also seem a little tentative about playing the long side as long as the stock market is vulnerable to a steep sell-off. This is because of the fear of margin call related selling.

Essentially, the direction of the April Comex gold market will be determined by trader reaction to the 50% level at $1672.80 and the 50% level at $1634.20.