Gold Price Futures (GC) Technical Analysis – Downside Momentum Could Drive Gold into $1309.20 to $1304.00

Gold prices fell on Wednesday as safe-haven buyers sought protection in the U.S. Dollar after British Prime Minister Theresa may announced she will step down as the leader of the United Kingdom if her Brexit deal finally secures a majority in parliament. The move would allow a successor to take the lead on future negotiations with the European Union.

At 19:58 GMT, June Comex gold futures are trading $1315.10, down $6.30 or -0.48%.

The dollar rose despite another plunge in U.S. Treasury yields. The strength in the greenback dampened foreign demand for dollar-denominated gold.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The market isn’t close to turning the main trend to up. This will occur if buyers can take out $1356.00. Buyers are having a hard time trying to overcome a key resistance area. Until they do, short-sellers shouldn’t worry too much about the trend changing to up. A move through $1287.50 will reaffirm the downtrend.

Gold contract range is $1410.30 to $1189.30. Its retracement zone is $1299.80 to $1325.90. The market is currently trading inside this zone. It is controlling the longer-term direction of gold.

The main range is $1356.00 to $1287.50. Its retracement zone at $1321.80 to $1329.80 is new resistance. Inside this zone is the contract’s Fibonacci level at $1325.90. This week’s high at $1330.80 was stopped by the upper level of this zone.

The short-term range is $1287.50 to $1330.80. If the downside momentum continues then look for a break into its retracement zone at $1309.20 to $1304.00. This zone is slightly above the major 50% level at $1299.80.

Essentially, Gold has been trading inside the $1299.80 to $1329.80 retracement zone since March 11.

Daily Swing Chart Technical Forecast

June Comex gold finished at $1315.10 on Wednesday. This puts it in the middle of the major retracement zone.

If the downside momentum continues then look for gold to test $1309.20. This is followed by $1304.00 and $1299.80. This price is the trigger point for an acceleration to the downside with $1287.50 the next major downside target.

If momentum shifts back to the upside then look for gold to test a series of retracement levels at $1321.80, $1325.90, $1329.80 and the minor top at $1330.80. This is the trigger point for an acceleration to the upside.