Gold Price Futures (GC) Technical Analysis – Strengthens Over $1849.70, Weakens Under $1843.00

Gold futures are edging lower on light volume late Tuesday as concerns over a fresh U.S. coronavirus relief package are keeping traders on the sidelines. A plunge in the U.S. Dollar against a basket of major currencies failed to draw the attention of major buyers, but it may have prevented further losses in the dollar-denominated asset.

At 18:53 GMT, April Comex gold is trading $1854.40, down $4.60 or -0.25%.

Helping to hold gold prices in a tight trading range is uncertainty ahead of the U.S. Federal Reserve’s monetary policy announcements on Wednesday. Traders expect the Fed to hold policy unchanged.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum has been edging higher since the formation of the closing price reversal bottom on January 11.

A trade through $1821.30 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a move through the nearest swing top at $1966.80.

The minor trend is up. This confirms the shift in momentum to up. A trade through $1878.10 will reaffirm the uptrend.

The minor range is $1821.30 to $1878.10. Traders are trying to establish support at its retracement zone at $1849.70 to $1843.00.

The short-term range is $1966.80 to $1821.30. Its retracement zone at $1894.10 to $1911.20 is the primary upside target.

The major long-term support is the retracement zone at $1787.30 to $1711.70.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold market into the close on Tuesday will be determined by trader reaction to the minor 50% level at $1849.70.

Bullish Scenario

A sustained move over $1849.70 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into $1878.10. This level could trigger an acceleration into $1894.10 to $1911.20.

Bearish Scenario

A sustained move under $1849.70 will signal the presence of sellers. The first target is $1843.00. Taking out this level with strong selling could drive the market into $1826.10 to $1821.30.