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Gold Price Futures (GC) Technical Analysis – $1869.10 – $1846.00 Retracement Zone Controlling Price Action

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James Hyerczyk
·2 min read
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Gold futures are trading higher, supported by a strong surge in silver prices but gains are being capped by a rally in the U.S. Dollar. Near the close on Monday, the market continues to straddle its two-month 50% to 61.8% retracement zone at $1869.10 to $1846.00, signaling trader indecision and impending volatility.

Silver stretched its rally to a third session on Monday, jumping as much as 11.2% to a near eight-year high as retail investors switched their focus from GameStop and other stocks to the beat-up and grossly oversold, in their opinion, precious metal.

At 19:12 GMT, April Comex gold is trading $1862.40, up $12.10 or +0.65%.

The U.S. Dollar bounced to a 2-week high on Monday on weakness in the Euro, Swiss Franc and Japanese Yen amid views that the U.S. has an advantage in growing its economy and vaccinating its population against COVID-19.

Daily April Comex Gold
Daily April Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1878.90 will signal a resumption of the uptrend. The main trend will change to down on a trade through $1832.40.

The main range is $1771.30 to $1966.90. The market is currently straddling its retracement zone at $1869.10 to $1846.00. This zone is controlling the near-term direction of the market.

The short-term range is $1966.80 to $1821.30. Its retracement zone at $1894.10 to $1911.20 is a potential upside target and trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold futures contract into the close on Monday is likely to be determined by trader reaction to the main 50% level at $1869.10.

Bearish Scenario

A sustained move under $1869.10 will indicate the presence of sellers. This could lead to a test of the Fibonacci level at $1846.00. If this price fails then look for a test of the main bottom at $1832.40. The main trend will change to down if this level is taken out.

Bullish Scenario

A sustained move over $1869.10 will signal the presence of buyers. This could trigger a rally into $1878.90. Taking out this level could trigger a surge into $1894.10 to $1911.20.

Side Notes

Many are predicting the rally in silver is not going to last and the move could end with a thud. If this is what’s holding the gold market up then the end of the silver rally is likely to drive gold prices lower especially if the U.S. Dollar continues to climb.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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