Gold Price Futures (GC) Technical Analysis – Sellers Targeting $1613.00 to $1610.90

Gold prices are trading lower on Monday, mostly in reaction to a stronger U.S. Dollar, which is reducing foreign demand for the dollar-denominated asset. The dollar is edging higher against a basket of currencies as coronavirus lockdowns tightened across the world and investors braced for a prolonged period of uncertainty.

At 11:41 GMT, June Comex gold is trading $1644.70, down $9.40 or -0.57%.

Gold could be under pressure on Monday if today becomes a risk-off day and investors shed positions in risky assets, while moving money into the safe-haven dollar. Gold is not a safe-haven asset, it is an investment and currently locked in to a relationship with equities. Meaning a steep break in stocks is likely to drag down gold prices.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $1707.80 will change the main trend to up. A move through $1453.00 will signal a resumption of the downtrend.

The market is also trading inside the wide range created on March 25. This tends to indicate investor indecision and impending volatility. Traders also formed a closing price reversal top. A trade through $1609.00 will confirm the potentially bearish chart pattern. This could trigger the start of a 2 to 3 day break.

The main range is $1707.80 to $1453.00. Its retracement zone at $1610.50 to $1580.40 is the next downside target and potential support area.

Daily Technical Forecast

Based on the early price action and the current price at $1644.70, the direction of the June Comex gold futures contract the rest of the session on Monday is likely to be determined by trader reaction to the downtrending Gann angle at $1647.80.

Bullish Scenario

A sustained move over $1647.80 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the next two downtrending Gann angles at $1677.80 and $1682.80. The latter is the last potential resistance angle before the $1698.00 minor top and the $1707.80 main top.

Bearish Scenario

A sustained move under $1647.80 will signal the presence of sellers. This could trigger a break into a support cluster at $1613.00 to $1610.50.

If $1610.50 fails then look for the selling to possibly extend into the 50% level at $1580.40. This is a potential trigger point for an acceleration to the downside.