Gold futures are surging on Thursday as stock market weakness is helping to boost the metal’s appeal as a safe-haven asset despite the strengthening U.S. Dollar. Buyers are also responding to weak economic data in Germany and South Korea, which suggest an impending global economic slowdown. Treasury yields have also been dropping all week indicating investors are looking for protection against a risky stock market.
At 14:46 GMT, June Comex gold is trading $1283.20, up $3.80 or +0.29%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has shifted to the upside. A trade through $1267.90 will change the main trend to down.
The main trend will change to up on a trade through $1314.70. However, this seems unlikely. Nonetheless, the market is in a position to post a weekly closing price reversal bottom, which would confirm the shift in momentum and could fuel a 2 to 3 week rally.
The minor trend is up. It turned up earlier in the session when buyers took out $1281.90. This also shifted momentum to the upside.
On the downside, the major support zone is $1272.70 to $1253.00. It was successfully tested earlier in the week when the market reached a bottom at $1267.90.
The short-term range is $1314.70 to $1267.90. If the upside momentum continues then look for a further rally into its retracement zone at $1291.30 to $1296.80.
Daily Technical Forecast
Earlier today, gold crossed to the strong side of a downtrending Gann angle at $1274.70, triggering a breakout over the long-term downtrending Gann angle at $1275.40. The momentum created by the move helped take out the minor top at $1281.90.
If the upside momentum continues then look for the rally to extend into the nearest downtrending Gann angle at $1286.80. Taking out this angle will indicate the buying is getting stronger with the next targets a 50% level at $1291.30, another downtrending Gann angle at $1294.70 and a Fibonacci level at $1296.80.
Since the main trend is down, sellers could come in on a test of $1291.30 to $1296.80.
This article was originally posted on FX Empire