Gold Price Futures (GC) Technical Analysis – Rebounding after Counter-Trend Buyers Defended $1783.80 Bottom
Gold futures are down on Monday but off overnight session lows as firm Treasury yields and U.S. Dollar weighed on demand for bullion. The market bounced after nearing a 3-1/2 month low early in the session. The catalyst behind the move may have been a drop in demand for riskier assets after China released gloomy economic reports.
Higher Treasury yields tend to raise the opportunity cost of holding non-yielding bullion, while a stronger greenback tends to weigh on foreign demand for the dollar-denominated metal. However, signs of an economic slowdown tend to be supportive for gold because they could encourage central banks from raising interest rates too aggressively.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the January 28 bottom at $1783.80 will reaffirm the downtrend. A move through $1910.70 will change the main trend to up.
The minor trend is also down. A trade through $1858.80 will change the minor trend to up. This will also shift momentum to the upside.
The minor range is $1910.70 to $1785.00. Its 50% level or pivot is the nearest resistance at $1847.90.
The key resistance is formed by a short-term Fibonacci level at $1897.70 and a long-term 50% level at $1908.10.
Daily Swing Chart Technical Forecast
Trader reaction to $1808.20 is likely to determine the direction of the June Comex gold market on Monday.
A sustained move under $1808.20 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main bottom at $1783.80.
Taking out $1783.80 will reaffirm the downtrend and could trigger a further break into the December 15, 2021 main bottom at $1757.60, followed by the September 29, 2021 main bottom at $1726.40.
A sustained move over $1808.20 will indicate the presence of buyers. The first upside target is a minor pivot at $1821.90. Overcoming this level will indicate the buying is getting stronger with $1847.90 the next likely upside target, followed by the minor top at $1858.80.