Trading on Weakside of $1908.10 Puts June Comex Gold in Bearish Position

Gold futures are trading higher shortly before the close on Thursday, but well off its high, after a surge in U.S. Treasury yields and a sharp rise in the U.S. Dollar, drove down demand for bullion.

The market rose early in the session on the back of less-hawkish comments from Federal Reserve Chair Jerome Powell on Wednesday, but support for gold weakened later in the session as traders cast doubts about whether the Fed can afford not be aggressive with future rate hikes.

At 20:31 GMT, June Comex gold futures are trading $1879.20, up $10.40 or +0.56%. The SPDR Gold Shares ETF (SPY) settled at $175.19, down $0.61 or -0.35%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1849.70 will signal a resumption of the downtrend. A move through $2003.00 will change the main trend to up.

The minor trend is also down. A trade through $1921.30 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is $1849.70 to $1910.70. The market is testing its pivot at $1880.20 into the close.

On the upside, the resistance is a pair of retracement levels at $1897.70 and $1908.10.

Short-Term Outlook

The level controlling the direction of the June Comex gold market is the long-term 50% level at $1908.10.

As long as the market remains under $1908.10, it will remain in a bearish position. Taking out the recent main bottom at $1849.70 will indicate the selling pressure is getting stronger. This could trigger an acceleration into the January 28, 2022 main bottom at $1783.80.

Overtaking the long-term 50% level at $1908.10 will be an early sign of strength, but the initial rally is likely to be a labored event because of a number of retracement levels at $1932.90, $1958.70, $1965.90 and $1993.30.

Our work suggests that a sustained move over $1993.30 could trigger an acceleration into a pair of major tops at $2082.00 and $2122.70.