The direction of the June Comex gold futures contract on Monday is likely to be determined by trader reaction to $1838.10.
Treasury yields and a slightly weaker U.S. Dollar. Analysts said Friday’s weaker than expected retail sales report and calming comments from several Fed officials over inflation fears may be the catalysts behind the early strength.
At 11:09 GMT, June Comex gold futures are trading $1849.40, up $11.30 or +0.61%.
In other news, Dallas Federal Reserve President Robert Kaplan on Friday raised the prospect of a worrisome rise in U.S. inflation expectations, as imbalances between supply and demand for labor and goods put upward pressure on prices.
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out Friday’s high at $1847.10. A trade through $1808.40 will change the main trend to down.
The new minor range is $1808.40 to $1855.80. Its 50% level at $1832.10 is potential support.
The short-term range is $1754.60 to $1855.80. Its 50% level at $1805.20 forms a support cluster with the main bottom at $1808.40.
The direction of the June Comex gold futures contract on Monday is likely to be determined by trader reaction to $1838.10.
A sustained move over $1838.10 will indicate the presence of buyers. Taking out the intraday high at $1855.80 will indicate the buying is getting stronger. This could lead to a quick test of the main top at $1858.90.
The February 10 main top at $1858.90 is a potential trigger point for an acceleration into the January 29 main top at $1881.00.
A sustained move under $1858.90 will signal the presence of sellers. The first downside target is the minor pivot at $1832.10. We could see a technical bounce on the first test of this level, but if it fails then look for the selling to possibly extend into the support cluster at $1808.40 to $1804.90 over the near-term.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.