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.

At 12:11 GMT, June Comex gold is trading $1799.50, down $8.70 or -0.48%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $168.81, down $1.36 or -0.80%.

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.

Bearish Scenario

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.

Bullish Scenario

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.