Gold Price Futures (GC) Technical Analysis – Sustained Breakout Over $1831.80 Targets $1875.70 – $1878.90
Gold futures are inching toward a one-week high early Tuesday after posting a second day of gains the previous session. The strength is being fueled by a weaker U.S. Dollar and increasing hopes that a massive U.S. fiscal stimulus package designed to revive the U.S. economy will soon be signed into law.
At 05:02 GMT, April Comex gold futures are trading $1842.90, up $8.70 or +0.47%.
The greenback fell to an over one-week low against rival currencies, making gold cheaper for holders of other currencies. Meanwhile Biden’s $1.9 trillion COVID-19 relief package is expected to pass through Congress before March 15 even without Republican support.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1784.60 will reaffirm the downtrend. The main trend will change to up on a move through $1878.90.
The major support is a long-term retracement zone at $1787.30 to $1711.70. This zone stopped the selling on November 30 at $1771.30 and on February 4 at $1784.60.
The short-term range is $1878.90 to $1784.60. The market is currently straddling its 50% level at $1831.80.
The intermediate range is $1966.80 to $1784.60. Its retracement zone at $1875.70 to $1897.20 is potential resistance.
The main range is $2107.60 to $1771.30. Its retracement zone at $1939.50 to $1979.10 stopped the rally at $1966.80 on January 6.
Daily Swing Chart Technical Forecast
The early price action suggests the direction of the April Comex gold market on Tuesday is likely to be determined by trader reaction to the pivot at $1831.80.
A sustained move over $1831.80 will indicate the presence of buyers. If this generates enough upside momentum then look for a rally into the intermediate 50% level at $1875.70, followed closely by a main top at $1878.90.
A sustained move under $1831.80 will signal the presence of sellers. This could trigger a quick break into about $1814.70. If this fails then look for the selling to possibly extend into the main bottom at $1784.60.