June Gold Trapped Inside $1897.70 – $1958.70 RT Zone

Gold futures are trading lower for a second session on Tuesday, pressured by higher U.S. Treasury yields and a firmer U.S. Dollar. Additionally, U.S. stocks continued to rise, dampening demand for the so-called “safe-haven” asset. Another catalyst weighing on gold is the start of Russia-Ukraine peace talks.

Despite the weakness, losses are being limited by worries over inflation and a predictions of a possible U.S. recession.

At 06:34 GMT, June Comex gold futures are trading $1926.90, down $17.80 or -0.92%. On Tuesday, the SPDR Gold Shares ETF (GLD) settled at $179.08, down $3.30 or -1.81%.

In other news, benchmark 10-year bond yields hit their highest level since April 2019 on the day, buoyed by bets of aggressive interest rate hikes by the Federal Reserve to fight soaring inflation. Although gold is considered an inflation hedge, rising U.S. interest rates increase the opportunity cost of holding non-yielding bullion.

Gold’s safe-haven appeal was also pressured by hopes of progress in the first face-to-face peace talks between Ukraine and Russia in more than two weeks.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the price action suggests momentum may be getting ready to shift to the downside.

A trade through $1900.40 will change the main trend to down. A move through $2082.00 will signal a resumption of the uptrend.

The minor trend is also up. This is controlling the momentum. A trade through $1972.50 will strengthen the momentum. A trade through $1915.50 will change the minor trend to down.

The main range is the contract range at $2122.70 to $1693.40. The market is currently trading inside its retracement zone at $1908.10 to $1958.70.

The intermediate range is $1783.80 to $2082.00. Gold is also trading inside its retracement zone at $1932.90 to $1897.70.

The short-term range is $2082.00 to $1900.40. Its retracement zone at $1991.20 to $2012.60 is the nearest upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract on Tuesday is likely to be determined by trader reaction to $1932.90.

Bearish Scenario

A sustained move under $1932.90 will indicate the presence of sellers. If this creates enough downside momentum then look for a test of the support cluster at $1908.10 to $1897.70. Inside this zone is the main bottom at $1900.40.

A trade through $1900.40 will change the main trend to down. This could trigger a further break into the next main bottom at $1882.00. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over $1932.90 will signal the presence of buyers. If this move creates enough upside momentum then look for a surge into $1958.70.

Overtaking $1958.70 will indicate the buying is getting stronger. This could lead to a test of $1972.50. Taking out this level could trigger a spike into $1991.20 to $2012.60.