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James Hyerczyk
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Gold

Falling Treasury yields and a lower U.S. Dollar are driving gold futures higher on Friday as bullish traders hope to recapture some of the losses from a three-day setback. The market is also being underpinned by comments from a few Federal Reserve officials who downplayed expectations for an imminent rise in interest rates despite a sharp rise in inflation.

At 11:26 GMT, June Comex gold is trading $1834.20, up $10.20 or +0.56%.

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“There’s too much risk involved to start either aggressive tapering or raising rates because there is not enough underlying strength in the economy,” StoneX analyst Rhona O’Connell said.

Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $1846.30 will signal a resumption of the uptrend. The main trend will change to down on a move through $1754.60.

The minor trend is down. This is controlling the downside momentum. A new minor bottom was formed at $1808.40. A trade through this level will indicate the selling is getting stronger.

The minor range is $1846.30 to $1808.40. The market is currently trading on the strong side of its pivot at $1827.40.

The short-term range is $1754.60 to $1846.30. Its 50% level at $1800.50 is potential support.

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

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Daily Swing Chart Technical Forecast

The direction of the June Comex gold market on Friday is likely to be determined by trader reaction to $1827.40.

Bullish Scenario

A sustained move over $1827.40 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into $1846.30. Taking out this level will reaffirm the main trend and possibly lead to a test of the February 10 main top at $1858.90.

Bearish Scenario

A sustained move under $1827.40 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the minor bottom at $1808.40, followed by a pivot at $1800.50.

We could see a technical bounce on the first test of $1800.50, but if it fails then look for the selling to possibly extend into the major support at $1788.50.

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