Gold futures are inching higher early Tuesday, helped by a dip in U.S. Treasury yields and a softer U.S. Dollar.
Benchmark 10-year U.S. Treasury yields extended their decline on Tuesday after pulling back from the highest level in 3-1/2 years in the previous session, lifting prices of zero-yield gold for now.
The dip in yields is also encouraging investors to book profits in the U.S. Dollar after its index tested a 20-year high early Monday. The price action suggests the greenback may be due for a correction due to value issues and fear of interventions from several major central banks. A weaker dollar could drive up demand for gold from foreign buyers.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1849.70 will signal a resumption of the downtrend. A move through $1910.70 will change the main trend to up.
The minor range is $1849.70 to $1910.70. The market is currently trading on the weak side of its pivot at $1880.20, making it resistance.
This is followed by a short-term Fibonacci level at $1897.70, followed by a long-term 50% level at $1908.10.
Daily Swing Chart Technical Forecast
The direction of June Comex gold on Tuesday is likely to be determined by trader reaction to $1858.60.
A sustained move over $1858.60 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the minor pivot at $1880.20.
Sellers could come in on the first test of $1880.20, but overcoming this level could generate the momentum needed to challenge $1897.70, followed by the resistance cluster at $1908.10 – $1910.70.
A sustained move under $1858.60 will signal the presence of sellers. This could trigger a break into the main bottom at $1849.70. Taking out this level will reaffirm the downtrend. This could trigger a sharp break into the February 11 main bottom at $1824.40.
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This article was originally posted on FX Empire