Gold Price Futures (GC) Technical Analysis – Trigger Point for Downside Acceleration is $1332.30

Gold futures tumbled last week, driven lower by a combination of an easing of geopolitical tensions, increased demand for risky assets and rising U.S. interest rates. These factors along with a stronger U.S. Dollar are likely to keep the pressure on the dollar-denominated asset.

June Comex Gold futures settled the week at $1338.30, down $9.60 or -0.71%.

Interest rates and the dollar are expected to influence the direction of the market the most. Prices could turn higher quickly on short-covering if geopolitical tensions arise.

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Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart. A trade through $1369.40 will indicate the buying is getting stronger. A move through $1375.50 will signal a resumption of the uptrend.

The main trend will change to down on a trade through $1309.30. The weekly chart indicates there is plenty of room to the downside under this bottom with $1247.20 the next major target.

The short-term range is $1309.30 to $1369.40. Its retracement zone at $1339.40 to $1332.30 is currently being tested. This zone is very important to the structure of the chart pattern.

The main range is $1247.20 to $1375.50. If the selling pressure increases then its retracement zone at $1311.40 to $1296.20 will become the primary downside target.

Weekly Swing Chart Technical Forecast

Based on last week’s close at $1338.30, the direction of the gold market this week is likely to be determined by trader reaction to the short-term 50% level at $1339.40.

A sustained move under $1339.40 will indicate the presence of sellers. This could drive the market into the short-term Fibonacci level at $1332.30.

Since the main trend is up, buyers could come in on a test of the retracement zone at $1339.40 to $1332.30.

If $1332.30 fails as support and selling volume increases on the move, we could see an acceleration into $1311.40 to $1309.30.

The trend will change to down on a move through $1309.30 with $1296.20 the next major target.

A sustained move over $1339.40 will signal the presence of buyers. The next targets are $1369.40, $1369.60 and $1375.50, but in order to get there this week, there is going to have to be a major change in the fundamentals.