James Hyerczyk
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Gold futures are inching higher on Tuesday after overcoming an earlier setback. The market found support on the June 5, 2020 bottom at $1706.40. Good traders knew about that level since they chart the full contract. The guys who chart the near-by continuation probably missed it. Anyway, let’s see what traders can do with the turnaround.

At 13:00 GMT, April Comex gold is trading $1727.00, up $4.00 or +0.23%.

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Gold traders are closely monitoring Treasury yields today and the U.S. Dollar since they are highly correlated to the price of bullion. Central banks are also watching their domestic yields and stand ready to defend their monetary policy with aggressive intervention. The Fed doesn’t seem too worried about rising rates.

Daily April Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but currently setting up a potentially bullish closing price reversal bottom.

A trade through $1815.20 will change the main trend to up. Taking out the intraday low at $1704.60 will signal a resumption of the downtrend.

Gold is currently testing the bottom of a major retracement zone at $1787.30 to $1711.70. If traders can build a support base inside this zone, we could see the start of a strong rally.

The short-term range is $1815.20 to $1704.60. Its 50% level at $1759.90 is the next upside target.


Daily Swing Chart Technical Forecast

Given the prolonged move down in terms of price and time, the direction of the gold market today will be determined by trader reaction to yesterday’s close at $1723.00.

Bullish Scenario

A sustained move over $1723.00 will indicate the presence of buyers. If this creates enough upside momentum then look for an intraday surge into $1759.90. Sellers could come in on the first test of this level, but if buyers can overcome it then look for the rally to extend into $1787.30. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $1723.00 will signal the presence of sellers. This could lead to a retest of the Fibonacci level at $1711.70, followed by today’s low and the June 5, 2020 bottom at $1704.60.

If $1704.60 fails then look for a potential acceleration to the downside with the April 21, 2020 main bottom at $1679.60.

Side Notes

Gold could turn bullish rather quickly if the central banks band together to push yields lower by buying huge amounts of their respective debt.

All gold has to do is break the pattern of lower tops and lower bottoms and it could be off to the races to the upside.

A close over $1723.00 will form a closing price reversal bottom. If confirmed, we could see a minimum 2 to 3 day correction.

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

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