Gold Price Futures (GC) Technical Analysis – Straddling Key 50% Level at $1727.50Based on Friday’s price action, the direction of June Comex gold over the near-term is likely to be determined by trader reaction to $1727.50.
Gold futures are edging higher late in the session on Friday as traders react to increasing tensions between the United States and China. The biggest fear for investors is that the intensifying spat will lead the U.S. or China to take action that would curtail the global economic recovery from the restrictions and lockdowns due to the coronavirus pandemic.
At 18:38 GMT, June Comex gold is trading $1733.10, up $11.20 or +0.65%.
U.S.-China friction came to the fore again over the source of the coronavirus and escalated further with China’s proposal to impose security laws on Hong Kong, drawing flak from Washington.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on May 18.
A trade through $1775.80 will negate the closing price reversal and signal a resumption of the uptrend. The main trend will change to down on a trade through the last main bottom at $1676.00.
The minor trend is down. This confirmed the shift in momentum. A trade through $1757.60 will change the minor trend to up.
The short-term range is $1788.80 to $1666.20. Its 50% level at $1727.50 is controlling the near-term direction of the market.
The main range is $1576.00 to $1788.80. Its retracement zone at $1682.40 to $1657.30 is the next potential target zone. This zone stopped the selling at $1676.00 and $1666.20 recently.
Based on Friday’s price action, the direction of June Comex gold over the near-term is likely to be determined by trader reaction to $1727.50.
A sustained move over $1727.50 will indicate the presence of buyers. If this can build a support base at this level, it could generate the momentum needed to challenge $1775.80 and $1788.80.
A sustained move under $1727.50 will signal the presence of sellers. This could lead to an eventual acceleration to the downside with the next major target the 50% level at $1682.40.