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James Hyerczyk
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Comex Gold

Gold futures are trading lower late in the session on Monday, putting the market in a position to post a potentially bearish closing price reversal top. Early in the session, buyers drove the market into its highest level since February 25 before enough sellers arrived to stop the rally and trigger a steep intraday break. A rebound in Treasury yields, firmed the U.S. Dollar, dampening demand for the dollar-denominated asset.

At 18:22 GMT, June Comex gold futures are trading $1770.40, down $9.80 or -0.55%.

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Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, late in the session, there are signs that momentum is getting ready to shift to the downside.

A trade through the intraday high at $1790.40 will signal a resumption of the uptrend. The main trend will change to down on a move through $1723.20.

The major resistance is the long-term 50% level at $1788.50. This level essentially stopped the rally on Monday.

The first support is a short-term 50% level at $1767.60. The second support is the minor 50% level at $1756.80. These are followed by additional 50% levels at $1747.20 and $1733.90.

The major support is the long-term 61.8% level at $1711.90.

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Short-Term Outlook

The direction of the June Comex gold market over the near-term is likely to be determined by trader reaction to $1780.20.

Bearish Scenario

A sustained move under $1780.20 will indicate the presence of sellers. Taking out $1767.60 will indicate the selling is getting stronger with $1756.80 the next downside target, followed by $1747.20 and $1733.90.

Bullish Scenario

A sustained move over $1780.20 will signal the presence of buyers. This could trigger a near-term rally into $1788.50 and $1790.40. The latter is a potential trigger point for an acceleration to the upside.

Side Notes

A close under $1780.20 will form a potentially bearish closing price reversal top. If confirmed, this could the start of a 2 to 3 day correction with the first potential target coming in at $1756.80 and the second at $1733.90.

For a look at all of today’s economic events, check out our economic calendar.
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