Gold futures are trading lower at the mid-session after plunging to their lowest level of the year early Tuesday. Dollar-denominated gold is being pressured a stronger Greenback, firmer Treasury yields and increased appetite for risky assets. The catalyst for the selling is an improving economic picture for the U.S. and China.
At 16:41 GMT, June Comex gold futures are trading $1276.80, down $14.50 or -1.12%.
Last week, the U.S. reported that weekly jobless claims hit a 49-1/2 year low. This confirmed the strength in the U.S. labor market, while dampening concerns over a slowdown in the economy. China reported stronger-than-expected export data, which suggested its economy may be stabilizing.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1284.90 confirmed the downtrend. The main trend will change to up on a trade through $1314.70.
One major range is $1284.40 to $1356.00. Its retracement zone is $1285.50 to $1268.90. The market is currently testing this range. It is controlling the near-term direction of the market.
Daily Technical Forecast
Based on the early price action and the current price at $1276.80, the market is trading on the weak side of a steep downtrending Gann angle at $1282.70. This has put it in an extremely bearish position. Holding on the bearish side of this angle could create the downside momentum needed to challenge the major Fibonacci level at $1268.90.
Overcoming the angle at $1282.70 will indicate that buyers have returned. This could trigger a rally into the major 50% level at $1285.50.
This article was originally posted on FX Empire
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