Gold futures are trading lower on Monday, weighed down by optimism over a U.S.-China trade deal that has lifted risk sentiment. However, prices could rebound later in the session if U.S. equity markets continue to slide and U.S. Treasury reverse course to the downside. A further strengthening of the Euro could also weigh on the U.S. Dollar Index, which would also be supportive for gold prices.
At 14:33 GMT, June Comex gold futures are trading $1288.60, down $6.40 or -0.50%. This is up from an intraday low of $1285.30.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1284.90 will signal a resumption of the downtrend. The main trend will change to up on a move through $1314.70.
The major support is a long-term retracement zone at $1285.50 to $1268.90.
The short-term range is $1284.90 to $1314.70. Its retracement zone at $1296.30 to $1299.80 is resistance.
Daily Technical Forecast
Based on the early price action and the current price at $1288.60, the direction of the June Comex gold futures contract the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at $1288.40.
Recovering $1288.40 and sustaining the rally will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to extend into the next uptrending Gann angle at $1291.90. A further extension over this angle could lead to a test of the short-term retracement zone at $1296.30 to $1299.80. Since the main trend is down, sellers could come in on a test of this zone.
A sustained move under $1288.40 will signal the presence of sellers. This could trigger a test of the major 50% level at $1285.50, followed by today’s intraday low at $1285.30 and the last main bottom at $1284.90.
Look out to the downside if $1284.90 fails as support. Not only will the main trend be reaffirmed, but we could also see an acceleration to the downside with a major Fibonacci level at $1268.90 the next target.
This article was originally posted on FX Empire
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