Comex gold futures bulls are still trying to recover from the late-February swoon in prices, but March came and went with the bearish gold camp having the better month. Nearby gold futures prices depreciated by just over $50 an ounce during March. The past few weeks have seen bolder forecasts from prognosticators that the precious yellow metal's best days are now behind it.
From a technical perspective, however, it is important to note that gold prices remain in an 11-year-old uptrend on the longer-term charts. The monthly Comex gold futures chart shows nearby prices have been trending higher from the 2001 low of $255.00 an ounce. The longer-term price uptrend began to accelerate in late-2008 and gold hit a new all-time record high of $1,923.70 an ounce in September of 2011. A downside price "correction" of a few hundred dollars, as depicted on the longer-term monthly chart at present, has not produced significant longer-term technical damage and the price uptrend on that chart remains in place. It would take a drop in nearby Comex gold futures prices below major longer-term technical and psychological support at $1,500.00 per ounce to break the longer-term uptrend and to begin to produce significant longer-term technical damage that would also then suggest a major market top is in place.
In fact, from a longer-term chart perspective, the recent "backing and filling" on the monthly chart can be considered healthy consolidation and hint that more upside price action is likely in the coming months. When a market price skyrockets higher with little or no downside price corrections on the chart, that is a bearish technical warning signal that the bulls have become overextended, are running out of gas and a market top is near.
Still, the near-term technical posture of the gold market is worrisome to the bullish camp. The active June Comex gold futures contract has been trending lower from the late-February high of $1,795.10 an ounce. In late March, prices hit a fresh two-month low of $1,629.80 and have since seen a modest rebound. For the gold market bulls to regain some fresh upside in near-term technical momentum, they will have to produce a close above psychological resistance at $1,700.00 an ounce. The gold market bears would gain fresh near-term downside technical momentum by pushing June futures' prices below solid near-term technical support at the March low of $1,629.80.