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Gold Price Futures (GC) Technical Analysis – Could Be Building Support Base at Long-Term Retracement Zone

James Hyerczyk

Gold futures edged higher on Friday as selling eased in the global equity markets and demand for the U.S. Dollar softened. Despite the small uptick in prices, gold finished lower for the week as investors sold the precious metal to raise cash to meet margin calls in other assets.

Shares in Asia and Europe finished their sessions higher, which gave the major U.S. stock indexes and gold an early boost. Stocks turned lower late in the session after Governor Cuomo placed place New York on ‘pause’ as coronavirus cases soared above 8,500, gold was able to hold on to some of its gains.

On Friday, June Comex gold settled at $1488.10, up $5.80 or +0.39%.

Daily June Comex Gold

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1453.00 will signal a resumption of the downtrend with the next targets a pair of main bottoms at $1428.90 and $1413.90.

A move through $1707.80 will change the main trend to up. This is highly unlikely, but there is room to the upside for a normal 50% to 61.8% correction.

The current square the June Comex gold futures contract is working inside is $1238.80 to $1707.80. Its 50% to 61.8% retracement zone is $1473.00 to $1417.50. This zone stopped the selling on March 16 at $1453.00.

The new short-term range is $1707.80 to $1453.00. If there is a technical bounce from the support zone then look for the rally to possibly extend into the short-term retracement zone at $1580.40 to $1610.50.

Daily June Comex Gold

Short-Term Outlook

We’re going to be paying close attention to the 50% level at $1473.00 next week. Trader reaction to this level could set the tone in the market over the short-run. The next upside target is $1580.40 to $1610.50.

Gold isn’t going to rally unless it gets help from the stock market because the two assets have been directly correlated for about three weeks.

If stocks continue to weaken then look for a break under $1473.00. This could lead to a test of a long-term uptrending Gann angle at $1439.00. We could see a technical bounce on the first test of this Gann angle, but I wouldn’t call it support. Based on its history, it has been primarily used for guidance rather than support.

If the Gann angle fails as support then look for the selling to extend into the major Fibonacci level at $1417.50. This level is a potential trigger point for an acceleration to the downside.

This article was originally posted on FX Empire