Gold Price Futures (GC) Technical Analysis – Strengthens Over $1608.50, Weakens Under $1595.70

Gold prices are edging higher on Tuesday supported by hopes that major central banks will trim interest rates in an effort to combat the coronavirus and its impact on the global economy. Investors are no focused on a G7 conference call at 12:00 GMT where finance ministers and central bank governors will discuss measures to deal with the coronavirus outbreak. They will, however, stop short of coordinated rate cuts, two G7 officials said.

At 12:51 GMT, April Comex gold is trading $1604.10, up $9.30 or +0.59%.

Also helping to boost dollar-denominated gold is a weaker U.S. Dollar. It is being pressured by expectations of a cut of at least 25 basis points to the current 1.50%-1.75% target rate at the Federal Reserve’s March 17-18 meeting.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1564.00 will signal a resumption of the downtrend. This is followed by additional main bottoms at $1551.10 and $1542.80. The main trend will change to up on a move through $1691.70.

The main range is $1458.50 to $1691.70. Its retracement zone at $1575.10 to $1547.50 is acting like support.

Daily Technical Forecast

Based on the early price action and the current price at $1604.10, the direction of the April Comex gold futures contract the rest of the session on Tuesday is likely to be determined by trader reaction to the steep downtrending Gann angle at $1595.70.

Bullish Scenario

A sustained move over $1585.70 will indicate the presence of buyers. The first target is an uptrending Gann angle at $1608.50.

Overcoming $1608.50 will indicate the buying is getting stronger. This could trigger a surge into the 50% level at $1627.90. Sellers could come in on the first test of this level.

Taking out $1627.90 could trigger a further rally into the Fibonacci level at $1642.90, followed by another downtrending Gann angle at $1643.70.

Bearish Scenario

A sustained move under $1608.50 will signal the presence of sellers. The first downside target is the main 50% level at $1575.10. If this fails to hold then look for the selling to possibly extend into the main Fibonacci level at $1547.60. This is followed by an uptrending Gann angle at $1533.50.