Gold Price Futures (GC) Technical Analysis – Sustained Move Under $1846.00 Puts Gold in Weak Position

Gold futures are trading sharply lower shortly after the regular session opening. The catalysts behind the selling pressure are a steep drop in silver prices, a stronger U.S. Dollar and firm Treasury yields.

The market didn’t follow silver prices higher on Monday, but they are following it lower today. Silver is shedding over 2% on Tuesday on long-liquidation tied to higher margin requirements at the CME. A weaker Euro is driving the dollar higher, which is driving down demand for dollar-denominated gold. Rising Treasury yields are also weighing on gold prices because the precious metal doesn’t pay any interest, therefore making it a less attractive investment.

At 14:16 GMT, April Comex gold futures are trading $1836.90, down $27.00 or -1.45%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on a trade through the previous main bottom at $1832.40. A move through $1878.90 will change the main trend back up.

The main range is $1771.30 to $1966.80. The market is currently trading on the weak side of its retracement zone at $1869.10 to $1846.00, putting it in a bearish position.

The next potential downside target is the longer-term 50% level at $1787.30.

The short-term range is $1966.80 to $1821.30. If the uptrend resumes then its retracement zone at $1894.10 to $1911.20 will become the primary upside target.

Daily Swing Chart Technical Forecast

The early price action indicates that the direction of the April Comex gold market into the close on Tuesday will be determined by trader reaction to $1846.00.

Bearish Scenario

A sustained move under $1846.00 will indicate the presence of sellers. A trade through the intraday low at $1830.70 will indicate the selling pressure is getting stronger. This could trigger a further break into the minor bottom at $1826.10, followed by the main bottom at $1821.30.

Taking out $1821.30 could trigger an acceleration to the downside with $1787.30 the next major target.

Bullish Scenario

A sustained move over $1846.00 will indicate the return of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into $1869.10, followed closely by $1878.90. This is a potential trigger point for an acceleration to the upside with $1894.10 to $1911.20 the next likely target.

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