Gold futures slid to a more than two-month low early Thursday, weakened by a robust U.S. Dollar and the fading chances of additional fiscal stimulus measures. Adding to the uncertain outlook for gold, U.S. Federal Reserve officials reaffirmed their low interest monetary policy until the labor market recovers or inflation rises to 2%, but failed to offer a path for further stimulus, while asking the federal government to do more.
At 12:48 GMT, December Comex gold futures are trading $1856.90, down $11.50 or -0.62%.
In other news, the number of first-time filers for unemployment benefits were slightly higher than expected last week as the labor market continues its sluggish recovery from the coronavirus pandemic. Gold traders showed little response to the news.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out yesterday’s low at $1856.00. The main trend will change to up on a move through the last main top at $1983.80.
The main range is $1690.10 to $2089.20. The market is currently testing its retracement zone at $1889.70 to $1842.60. This zone is controlling the near-term direction of the market.
The new minor range is $1983.80 to $1851.00. Its 50% level at $1917.40 is a potential upside target and resistance level.
Daily Swing Chart Technical Forecast
With the market currently trading inside the major retracement zone, the direction the rest of the session is likely to be determined by trader reaction to the Fibonacci level at $1842.60.
A sustained move under $1842.60 will indicate the presence of sellers. This could lead to a labored break with potential downside targets former bottoms at $1819.30, $1788.30 and $1772.00.
Looking at it another way, a break under $1842.60 could trigger an acceleration to the downside with the June 5 main bottom at $1690.10 the next major downside target.
A sustained move over $1842.60 will indicate the selling is slowing or aggressive counter-trend traders are buying. If this creates enough upside momentum then look for the rally to possibly extend into the main 50% level at $1889.70. Since the main trend is down, sellers could come in on the first test of this level.
Overcoming $1889.70 will indicate the buying is getting stronger. This could extend the rally into the pivot at $1917.40.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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