Gold Price Futures (GC) Technical Analysis – Direction into Close Determined by Trader Reaction to $1728.70

Gold prices are lower on Monday, but a stock market rebound has helped the precious metal recover some of today’s earlier losses. Stocks were trading sharply lower in the pre-market session, triggering a flight to safety rally into the U.S. Dollar. This pressured demand for dollar-denominated gold.

At 16:52 GMT, August Comex gold is trading $1727.30, down $10.00 or -0.58%.

As stocks began to recover from their earlier losses, investors began to shed the safe-haven dollar, driving up foreign demand for gold.

Gold also began the session on a week note, following the announcement from the CFTC that speculators cut their bullish positions in COMEX gold and silver contracts in the week to June 9. Some traders said that fears of a second wave of coronavirus infections helped underpin the market.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1761.00 will change the main trend to up. A move through $1671.70 will signal a resumption of the downtrend.

The minor trend is also down. A trade through $1754.90 will change the minor trend to up. This will also shift momentum to the upside.

The minor trend is $1671.70 to $1754.90. Its 50% level at $1713.30 is support. This level was tested earlier today.

The short-term range is $1789.00 to $1668.40. Its 50% level at $1728.70 is controlling the near-term direction of gold.

The main range is $1454.80 to $1789.00. Its retracement zone at $1621.90 to $1582.40 is helping to control the longer-term upside bias.

Short-Term Outlook

Based on the early price action and the current price at $1727.30, the direction of the August Comex gold futures contract into the close is likely to be determined by trader reaction to the 50% level at $1728.70.

Bullish Scenario

A sustained move over $1728.70 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into $1754.90 then $1761.00. Taking out $1761.00 will change the main trend to up. This could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under $1728.70 will signal the presence of sellers. This could trigger a break into $1713.30.

Taking out $1713.30 could trigger an acceleration to the downside with potential targets coming in at $1671.70 and $1668.40.

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