Gold Price Futures (GC) Technical Analysis – Strengthens Over $1842.90, Weakens Under $1831.80

Gold futures are edging higher late in the session on Tuesday, supported by another decline in the U.S. Dollar against a basket of currencies and as Democrats appeared to move closer to passing President Joe Bidens coronavirus relief package. Additionally, traders feel the U.S. Federal Reserve is going to be very accommodative for quite some time.

At 20:06 GMT, April Comex gold futures are trading $1837.80, up $3.60 or +0.20%.

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The lackluster price action suggests the market may still be in the short-covering stage after recovering from a test of a multi-month low last week. Others suggest the market will have a hard time rallying as long as money continues to flow into the higher-yielding stock market. Gold traders are also monitoring the movement in U.S. Treasury yields, which ultimately control the direction of the U.S. Dollar.

[fx-image src=/2021/02/Daily-April-Comex-Gold-5.jpg data-zoom-target=https://responsive.fxempire.com/cdn/n/n/_fxempire_/2021/02/Daily-April-Comex-Gold-5.jpg originalWidth=1920 ratio=1.99]Daily April Comex GoldDaily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1784.60 will signal a resumption of the downtrend, while a move through $1878.90 will change the main trend to up.

The major support is a long-term retracement zone at $1787.30 to $1711.70. This zone represents 50% to 61.8% of last years trading range. It also stopped the selling at $1784.60 last week.

The short-term range is $1878.90 to $1784.60. The market is currently straddling its retracement zone at $1831.80 to $1842.90.

The intermediate range is $1966.80 to $1784.60. Its retracement zone at $1875.70 to $1897.20 is the next upside target area.

If the main trend changes to up then look for the rally to possibly extend into $1939.50 to $1979.10.

[fx-article-ad]Short-Term Outlook

Based on Tuesdays price action, the direction of the April Comex gold futures market into the close is likely to be determined by trader reaction to $1831.80 and $1842.90.

Bullish Scenario

A sustained move over $1842.90 will indicate the presence of buyers. If this can create enough upside momentum then look for the rally to possibly extend into $1875.70 – $1878.90 over the near-term.

Bearish Scenario

A sustained move under $1831.80 will signal the presence of sellers. The first downside target is $1817.00. If this fails then look for the selling to possibly extend into the potential support cluster at $1787.30 – $1784.60 over the short-run.

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