Gold futures succumbed to pressure from a stronger dollar, increased demand for higher risk assets and the easing of geopolitical concerns to close lower at the end of the week.
June Comex gold futures settled at $1327.30, down $2.70 or -0.20%.
The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on March 27.
A trade through $1312.40 will change the main trend to down. This is followed closely by another main bottom at $1309.30.
A move through $1362.60 will negate the reversal top and signal a resumption of the uptrend with potential targets main tops at $1369.60 and $1375.50.
The short-term range is $1312.40 to $1362.60. Its retracement zone at $1331.60 to $1337.50 is the first layer of resistance.
The main range is $1375.50 to $1309.30. Its retracement zone at $1342.40 to $1350.20 is the primary upside target.
Based on the close at $1327.30, the short-term direction of the market is likely to be determined by trader reaction to the Fib level at $1331.60.
A sustained move under $1331.60 will indicate the presence of sellers. We could see an acceleration to the downside with targets coming in at $1312.40, $1311.40 and $1309.30.
Overcoming and sustaining a move over $1331.60 will indicate the return of sellers. This could generate the momentum needed to challenge $1337.50 and $1342.40.
Remember that despite the volatility, the trend is up so buyers could step in to stop this price slide.
This article was originally posted on FX Empire
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