Gold Price Futures (GC) Technical Analysis – Testing Key Retracement Zone at $1315.70 to $1307.60

Gold finished sharply lower on Thursday. The catalyst behind the selling pressure was the stronger-than-expected U.S. GDP report. The news raised the chances of at least one Fed rate hike later this year, driving U.S. Treasury yields sharply higher. This helped make the U.S. Dollar a more attractive asset while driving down demand for dollar-denominated gold.

At 23:15 GMT, April Comex gold is trading $1315.70, down $0.04 or -0.03%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1304.70 will change the main trend to down. A move through $1349.80 will signal a resumption of the uptrend.

The main range is $1281.50 to $1349.80. Its retracement zone at $1315.70 to $1307.60 is the primary downside target. The market is currently testing its upper or 50% level at $1315.70.

The short-term range is $1304.70 to $1349.80. Its retracement zone at $1321.90 to $1327.30 is resistance.

Daily Swing Chart Technical Forecast

Based on yesterday’s close and the early price action, the direction of the April Comex gold futures contract on Friday is likely to be determined by trader reaction to the main 50% level at $1315.70. Since the main trend is up, buyers are likely to show up on the initial test of this level.

Bullish Scenario

A sustained move over $1315.70 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into the short-term Fibonacci level at $1321.90. Taking out this level will indicate the buying is getting stronger with the short-term 50% level at $1327.30 the next upside target.

The 50% level at $1327.30 is the best trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $1315.70 will signal the presence of sellers. If this can generate enough downside momentum then look for the selling extend into the main Fibonacci level at $1307.60. If this fails then look for a move into the main bottom at $1304.70. Taking out this bottom will change the main trend to down.

The daily chart is wide open to the downside under $1304.70 with $1281.50 the next major target. Be prepared for an acceleration to the downside if $1304.70 is taken out with strong selling volume.