Gold Price Futures Technical Analysis

Gold Price Futures Technical Analysis

$GC $XAU $GLD $USD

Gold futures in New York soared for a 2nd session running Tuesday on continued reaction to the Fed’s extraordinary measures to help an economy ravished from the coronavirus pandemic and demand/supply issues.

The Fed revealed Monday several programs including lending against student loans, credit card loans and US government backed-loans to small businesses.

Gold investors should be concerned about is the number of USDs the measures are injecting into the financial system. More cash floating around generally leads to a weaker Buck and consequently more foreign demand for USD-denominated gold.

Although US stocks did not rally immediately on the news, they did Tuesday, dampening the need to sell in gold to raise money to meet stock-related margin calls.

At 17:38 GMT, June COMEX gold is trading 1663.00, +90.30 or +5.74%.

Daily June COMEX Gold

The main trend is down in gold, but momentum has shifted to the Northside. The trend will turn up on a trade through the multi-year high at 1707.80. A trade through 1453.00 signals a resumption of the downtrend.

This rally started when gold found support inside its contract 50% to 61.8% Fibo retracement zone at 1473.00 – 1417.50 on 16 March at 1453.00.

The short-term range is 1707.80 – 1453.00. The rally accelerated earlier Tuesday when the market crossed to the strong side of its Fibo retracement zone at 1610.50 – 1580.40. This zone is new support.

Usually, when the trend is down, sellers come in on a test of the 1st Fibo retracement zone down from the last main Top.

In this case, 1580.40 – 1610.50 is the Fibo retracement zone and 1707.80 is the main Top. The sellers come in because they are trying to form a secondary lower Top, which is a pretty strong sign that the shorts are taking control of the market.

But, Tuesday, pent up buyers blew out the short-sellers attempting to make the secondary lower Top. So, a combination of new buying and short-covering led to the spike in prices.

If buyers have regained control of gold then they will defend 1610.50 – 1580.40 it will become support.

This is the zone to focus on now.

Have a healthy day, stay home!

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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