Gold futures are trading flat shortly before the regular session opening. On Tuesday, the market plunged on a surge in demand for risky assets. Traders who bought gold recently were burned when investors dumped the so-called safe-haven asset and returned to the higher-yielding stock market.
Buyers did return early Wednesday as the market neared its January low. Traders said that renewed buying tied to the outbreak of the coronavirus helped prop up prices.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The trend turned down on Tuesday when sellers took out the $1567.90 main bottom. The next downside target is the $1542.80 main bottom. The trend will change to up on a move through $1598.50.
On the downside, the major support zone is $1539.10 to $1520.00.
The intermediate range is $1619.60 to $1542.80. Its retracement zone at $1581.20 to $1590.30 is resistance.
The short-term range is $1542.80 to $1598.50. Its retracement zone at $1564.10 to $1570.70 is additional resistance.
Daily Technical Forecast
Based on the early price action and the current price at $1555.60, the direction of the April Comex gold futures contract the rest of the session on Wednesday is likely to be determined by a pair of uptrending Gann angles at $1550.20 and $1557.80.
Bullish Scenario
A sustained move over $1557.80 will indicate the presence of buyers. This could lead to a labored rally with early targets lined up at $1564.10 and $1570.70. Overtaking the uptrending Gann angle at $1572.80 will indicate the buying is getting stronger.
Bearish Scenario
A sustained move under $1557.80 will signal the presence of sellers. Taking out the angle at $1550.30 will indicate the selling is getting stronger with potential targets the main bottom at $1542.80 and the major 50% level at $1539.10.
Side Notes
The most important value zone on the chart is $1539.10 to $1520.00. A break into this zone could bring in the buyers.