Gold Price Futures (GC) Technical Analysis – Retracement Zone Support at $1682.40 – $1657.30

Gold futures are trading slightly lower shortly before the regular session opening on Monday. Volume is below average and the range is narrow, suggesting investor indecision and impending volatility.

Traders are getting no help from the other financial markets that tend to give them guidance. Stocks are drifting lower as well as the U.S. Dollar Index. Treasury yields are also edging lower.

At 10:18 GMT, June Comex gold futures are trading $1691.90, down $6.90 or -0.41%.

Earlier in the session, gold hit a more than one-week low as doubts over the United States’ plans to reopen the world’s largest economy as the novel coronavirus pandemic showed no signs of easing.

Normally concerns over whether the U.S. can successfully reopen its economy would’ve sent gold prices higher, but we’re not trading under normal market conditions. When there’s trouble, most investors have been seeking shelter in the U.S. Dollar, driving it higher. When the greenback strengthens, demand for dollar-denominated gold tends to drop, taking prices with it.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however momentum has been trending lower since last Thursday.

A trade through the last main top at $1788.80 will signal a resumption of the uptrend. The main trend will change to down on a trade through the last main bottom at $1576.00.

The minor trend is down. It changed to down on Thursday when sellers took out the minor bottom at $1731.60. This shifted momentum to the downside.

The minor range is $1670.70 to $1788.80. Its 50% level or pivot at $1729.80 is resistance.

The short-term range is $1576.00 to $1788.80. Its retracement zone at $1682.40 to $1657.30 is the next downside target. Since the main trend is up, buyers could come in on a test of this area. They are going to try to form a secondary higher bottom.

The intermediate range is $1453.00 to $1788.80. Its retracement zone at $1620.90 to $1581.30 is the second potential support zone.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $1691.90, the direction of the June Comex gold market the rest of the session on Monday is likely to be determined by trader reaction to the short-term 50% level at $1682.40.

Bullish Scenario

A sustained move over $1682.40 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into the minor pivot at $1729.80.

Bearish Scenario

A sustained move under $1682.40 will signal the presence of sellers. The next downside targets are a minor bottom at $1670.70 and the short-term Fibonacci level at $1657.30.

Taking out $1657.30 could trigger an acceleration into the 50% level at $1620.90.