Since selling off from its $1365 late January high down to below $1310 last week, gold futures have bounced over the last five sessions.
Currently, gold is at the $1334 area, around the midway point of the $1310-$13165 range. We will use the hourly candlestick chart below, which covers the past three weeks of price action, to take a look at important levels to both the up and downside.
First, we will look at targets to the upside.
On the chart, the upper trend line in lavender connects a series of lower highs over the past three weeks and has been serving as resistance. This trend line is now coming in at $1336, just above the current price. Closely coinciding with this trend line are two other markers - the 50% retracement of the recent range, shown by the red price line, at $1337, and the upper grey channel trend line at $1339.
If gold breaks above these three barriers, then we believe it will target last week’s high of 1349.3, marked in yellow, and that this will be the line in the sand for bears to hold before losing this market.
Above that level, targets would include three previous highs. The first is the February 1st high of $1354.3, marked in orange, then the January 26th high of $1361 in green, and finally the 2018 high of $1365.4, marked in red.
Next, we will focus on downside levels. Below current price, the lower trend line at $1330.7 in black connects a series of higher lows since last week. If that breaks, then the targets would be a series of lows over the past few days. The first level would be Tuesday’s low of $1325.10, marked in red; the second would be Monday’s low of $1318.3 in green; the third would be Friday’s $1313.2 low in orange; and the final target would be last week’s low of $1309 low made on Thursday, marked in yellow..
Currently, we have no bias in this market, and we can appreciate the case to be made for each side. Therefore, we will follow this market looking for the trend line break-out as noted in this article.
Today’s economic calendar features two very relevant numbers at 8:30 a.m. EST, but following those, it becomes very quiet.
- MBA Mortgage Applications 7:00 AM ET
- Consumer Price Index 8:30 AM ET
- Retail Sales 8:30 AM ET
- Atlanta Fed Business Inflation Expectations 10:00 AM ET
- Business Inventories 10:00 AM ET
- EIA Petroleum Status Report 10:30 AM ET