June Gold Strengthens Over $2009.90, Weakens Under $1987.60

Gold futures are testing their highest level since March 14 on Monday as concerns over the economic fallout from the Russia-Ukraine war and the Federal Reserve’s ability to control surging inflation are encouraging investors to seek hedge protection in the precious metal.

At 12:07 GMT, June Comex gold futures are trading $1997.00, up $22.10 or +1.12%. Last Thursday, the SPDR Gold Shares ETF (GLD) settled at $184.00, down $0.65 or -0.35%.

The surprisingly strong upside momentum is showing no signs of letting up as buyers continue to feed off the negative headlines pertaining to the war in Ukraine and soaring inflation, while ignoring the potentially bearish news regarding the Federal Reserve’s aggressive stance and the threat of multiple interest rate hikes.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $1998.80 will signal a resumption of the uptrend. A move through $1916.20 will change the main trend to down.

Gold is up seven sessions from its last main bottom so technically it is inside the window of time for a closing price reversal top.

The minor trend is also up. A trade through $1962.70 will change the minor trend to down. This will also shift the momentum.

The short-term range is $2082.00 to $1893.20. The market is currently testing its retracement zone at $1987.60 to $2009.90. This zone is controlling the near-term direction of the market.

On the downside, the nearest support is the long-term Fibonacci level at $1958.70, followed by a 50% level at $1932.90.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold market into the close on Monday is likely to be determined by trader reaction to $1974.90.

Bullish Scenario

A sustained move over $1974.90 will indicate the presence of buyers. Overtaking the 50% level at $1987.60 will indicate the buying is getting stronger. This could trigger a further rally into the Fibonacci level at $2009.90. Sellers could come in on the first test of this level, however, overcoming it could trigger an acceleration to the upside with $2082.00 the next likely target.

Bearish Scenario

A sustained move under $1974.90 will signal the presence of sellers. This could trigger a break into the minor bottom at $1962.70, followed by the long-term Fibonacci level at $1958.70.

Side Notes

A close under $1974.90 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day counter-trend sell-off.