Gold Price Futures (GC) Technical Analysis – Surprisingly Stable Reaction to Yield Drop, Lower Dollar

Gold futures are inching higher early Tuesday, helped by a dip in U.S. Treasury yields and a softer U.S. Dollar.

At 04:52 GMT, June Comex gold futures are trading $1862.60, up $4.00 or +0.22%. On Monday, the SPDR Gold Shares ETF (GLD) settled at $172.92, down $2.50 or -1.43%.

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 June Comex Gold

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.

Bullish Scenario

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.

Bearish Scenario

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