Based on the current price at $1347.80 and the earlier price action, the direction of the gold market the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at $1350.20.
June Comex Gold futures are trading higher shortly before the regular session opening. Flight-to-safety buying is driving the market higher amid another triple-digit drop in Dow Jones Industrial Average futures during the pre-market trading session.
The main trend is up according to the daily swing chart. The trend turned up earlier in the week when buyers took out $1336.40. The uptrend was reaffirmed earlier today on the move through $1347.50. The market could accelerate to the upside over this level if enough buying volume comes in. The daily chart indicates there is room to run to $1369.60, followed by $1375.50.
The main range is $1247.20 to $1375.50. Its retracement zone at $1311.40 to $1296.20 is the major support area.
The short-term range is $1375.50 to $1309.30. Its retracement zone at $1342.40 to $1350.20 is currently being tested. Traders should treat this zone like a pivot.
Based on the current price at $1347.80 and the earlier price action, the direction of the gold market the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at $1350.20.
A sustained move over $1350.20 will indicate the presence of buyers. The daily chart indicates there is plenty of room to the upside with the main targets $1369.60 and $1375.60.
The inability to overcome and sustain a rally over $1350.20 will signal the return of sellers. This could drive prices back to the short-term 50% level at $1342.40. This price is the potential trigger point for an acceleration to the downside.
Basically, look for the bullish tone to continue or possibly elevate on a sustained move over $1350.20. Look for an intraday downside bias to develop on a sustained move under $1342.40.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.