Gold Price Futures (GC) Technical Analysis – Needs to Overcome $1788.50 with Conviction to Sustain Rally

Gold futures are edging higher early Monday with support being generated by a weaker U.S. Dollar. Gains, however, are likely being capped by firm Treasury yields. The dollar is being pressured amid speculation that U.S. Federal Reserve Chairman Jerome Powell will shun talk of tapering bond purchases at a policy meeting on Tuesday and Wednesday.

At 05:43 GMT, June Comex gold prices are trading $1782.60, up $4.80 or +0.27%.

Gold traders are also positioning themselves ahead of the Fed. While no major policy changes are expected, investors will pay close attention to Powell’s comments after the meeting. He is expected to defend the Fed’s policy of letting inflation run hot, while assuring markets it sees the pick-up in prices as only temporary. A dovish Powell could provide support for the gold market.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1798.40 will signal a resumption of the uptrend. The main trend will change to down on a trade through $1723.20.

The minor trend is also up. A trade through $1763.50 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is $1763.50 to $1798.40. The market is currently testing its 50% level at $1781.00.

The major resistance is the long-term 50% level at $1788.50.

Another minor range is $1723.20 to $1798.40. Its 50% level at $1760.80 is support.

The short-term range is $1677.30 to $1798.40. If the minor trend changes to down then look for the selling to possibly extend into its 50% level at $1737.90.

The major support is the long-term Fibonacci level at $1711.90.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold market on Monday is likely to be determined by trader reaction to $1781.00.

Bullish Scenario

A sustained move over $1781.00 will indicate the presence of buyers. This is followed by the main 50% level at $1788.50.

Taking out $1788.50 will indicate the buying is getting stronger with $1798.40 the next upside target. Overtaking this level could trigger an acceleration into the main top at $1817.60.

Bearish Scenario

A sustained move under $1781.00 will signal the presence of sellers. This could trigger a plunge into a support cluster at $1763.50 to $1760.80.

The 50% level at $1760.80 is a potential trigger point for an acceleration to the downside with $1737.90 the next likely target.

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