Gold Price Futures (GC) Technical Analysis – Look for Momentum Shift on Trade Through $1858.80

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June Comex gold futures are trading lower on Thursday as the U.S. Dollar resumed it uptrend. Earlier in the session, the market inched higher following yesterday’s closing price reversal bottom after Treasury yields dropped for a fourth session.

At 12:16 GMT, June Comex gold futures are trading $1843.20, down $10.50 or -0.57%. On Wednesday, the SPDR Gold Shares ETF (GLD) settled at $172.83, up $1.41 or +0.82%.

Investors Buying Liquid Safe-Haven Assets

When it comes to safety in the financial markets, traders are shunning gold. The asset most retail brokers call a “safe-haven”. Instead, they are flocking to the more liquid U.S. bonds, dollar and Yen.

The dollar rose to fresh two-decade highs on Thursday as concerns that tighter monetary policies to tame surging inflation will hurt the global economy dampened risk sentiment and drove investors into the safe-haven currency.

Data on Wednesday showed U.S. consumer price growth slowed sharply in April, suggesting that inflation had probably peaked, though it was likely to stay hot especially with U.S. gasoline prices hitting their highest levels of the year today.

The greenback benefited as the data confirmed expectations for further aggressive hikes in interest rates by the Federal Reserve and investors fretted that central bank tightening could slow global economic growth.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1830.60 will reaffirm the downtrend. A move through $1910.70 will change the main trend to up.

The minor range is $1910.70 to $1830.60. The market is trading below its pivot at $1870.70, making it resistance.

The major resistance is 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 the June Comex gold market on Thursday is likely to be determined by trader reaction to $1844.70.

Bearish Scenario

A sustained move under $1844.70 will indicate the presence of sellers. This could trigger a break into yesterday’s low at $1830.60. A failure at this price will likely lead to a test of the February 11 main bottom at $1824.40. This price is a potential trigger point for an acceleration into a support cluster at $1791.60 – $1783.80.

Bullish Scenario

A sustained move over $1844.70 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into the pivot at $1870.70. This is a potential trigger point for an acceleration into $1897.70, followed by a resistance cluster at $1908.10 – $1910.70.

Side Notes

June Comex gold formed a potentially bullish closing price reversal bottom on Wednesday. A trade through the intraday high at $1858.80 will confirm the chart pattern. This could trigger the start of a minimum 2-day correction.