Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1737.50 Pivot Determines Direction

Gold futures are trading mixed on Thursday as surging COVID-19 cases across Europe fueled concerns over the pace of the economic recovery in the region. Meanwhile, a stronger U.S. Dollar kept a lid on foreign demand for the dollar-denominated asset.

Traders are also keeping an eye on U.S. Treasury yields, which are inching higher on Thursday. Gold edged higher the previous session as yields retreated for a third straight session.

Given the five-day sideways trade, it’s going to take a spike in yields to the downside to trigger an upside breakout in gold. Patience is the key.

At 07:14 GMT, June Comex gold futures are trading $1732.60, down $2.90 or -0.17%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1817.60 turns the main trend to up. A move through $1676.20 will signal a resumption of the downtrend.

The minor trend is also down. A trade through $1756.00 will change the minor trend to up, while shifting momentum to the upside. A trade through $1719.10 will indicate the selling pressure is getting stronger.

The minor range is $1756.00 to $1719.10. The market is currently straddling its pivot at $1737.50.

On the downside, the nearest support is the long-term Fibonacci level at $1711.90, followed by the short-term Fibonacci level at $1706.70.

The short-term range is $1817.60 to $1676.20. Its retracement zone at $1746.90 to $1763.60 is potential resistance. This zone stopped the selling at $1756 on March 18.

The most important resistance is the long-term 50% level at $1788.50.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures market is likely to be determined by trader reaction to $1737.50.

Bearish Scenario

A sustained move under $1737.50 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into $1719.10, followed by the support cluster at $1711.90 to $1706.70.

Bullish Scenario

A sustained move over $1737.50 will signal the presence of buyers. The first upside target is $1746.90, followed by $1756.00 and $1763.60.