Gold prices are trading lower on Monday shortly after the regular session opening. The market is following the movement in the stock market although some say it’s being supported by growing concerns over the extent of the economic hit from the coronavirus pandemic.
Prices have been on a tear since last Thursday when the U.S. Federal Reserve announced a broad, $2.3 trillion stimulus package to weather the outbreak, which has forced 16.8 million Americans to file for unemployment benefits since the week-ended March 21.
At 13:30 GMT, June Comex gold is trading $1734.50, down $18.30 or-1.04%.
The market is also tracking the U.S. Dollar, which is trading higher against most major currencies, weighing on demand for dollar-denominated gold.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through $1754.50 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at $1576.00.
The minor trend is also up. A trade through $1670.70 will change the minor trend to down. This will shift momentum to the downside.
Daily Technical Forecast
The gold market is trading inside Friday’s range, which tends to indicate trader indecision and impending volatility.
A trade through $1754.50 will indicate the presence of buyers. If this creates enough momentum then look for a surge into the steep uptrending Gann angle at $1800.00. Overtaking this angle will put June Comex gold in an extremely bullish position.
On the downside, the nearest support is an uptrending Gann angle at $1688.00. Since the main trend is up, buyers are likely to come in on a test of this angle.
If the Gann angle at $1688.00 fails as support then look for the selling to extend into the minor bottom at $1670.70. Taking out this level could trigger an acceleration to the downside with the next target angle coming in at $1632.00.