Gold Price Futures (GC) Technical Analysis – Strong Over $1846.30, Weak Under $1830.50; Watch for Reversal Top

Gold futures are trading flat early Tuesday, mirroring the price action in the U.S. Dollar Index with gains being capped by a slight rise in U.S. Treasury yields. Volume is on the light side with some traders already moving to the sidelines ahead of Wednesday’s U.S. consumer price index report.

At 06:08 GMT, June Comex gold futures are trading $1836.50, down $1.10 or -0.06%.

Yields continued to rebound from two-month lows on Friday, following a far-weaker-than-expected jobs report. U.S. employers added 266,000 net payrolls in April, well below the 1 million additions forecast from economists polled by Dow Jones.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1846.30 will signal a resumption of the uptrend.

The main trend will change to down on a trade through $1754.60. This is highly unlikely, but with the market up eight sessions from its last main bottom, it begins today’s session inside the window of time for a potentially bearish closing price reversal top.

The minor range is $1754.60 to $1846.30. Its 50% level at $1800.50 is the first potential downside target.

The major support is the long-term 50% level at $1788.50.

Daily Swing Chart Technical Forecast

The current inside move suggests investor indecision and impending volatility. It also suggests the direction of the market on Tuesday will be determined by trader reaction to yesterday’s high at $1846.30 and yesterday’s low at $1830.50.

Essentially, the bulls want to see a continuation of the higher-high, higher-low chart pattern. The bears what to see a change in the pattern.

Bullish Scenario

A sustained move over $1846.30 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the February 10 main top at $1858.90.

Bearish Scenario

A sustained move under $1830.50 will signal the presence of sellers. If this move generates enough downside momentum then look for the start of a steep break with the minor pivot at $1800.50 the next potential downside target.

Side Notes

Taking out $1846.30 then closing lower for the session will form a potentially bearish closing price reversal top. If confirmed then look for the start of a 2 to 3 day correction with $1800.50 and $1788.50 the next potential downside targets.

For a look at all of today’s economic events, check out our economic calendar.