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James Hyerczyk
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Comex Gold
Comex Gold

Gold futures posted a volatile two-sided trade last week before closing lower. On Monday, buyers drove the precious metal higher in reaction to the previous week’s potentially bullish closing price reversal bottom chart pattern and concerns that weaker average hourly earnings reported in the July 6 U.S. Non-Farm Payrolls report could discourage the Fed from raising interest rates two more times this year.

However, the attempted rally failed to gain traction after the U.S. Dollar posted four straight sessions of higher closes. The Greenback was driven higher by strong U.S. producer and consumer inflation data which supported the Fed’s plan to raise interest rates at least two more times before the end of the year.

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August Comex Gold settled the week at $1241.20, down $14.60 or -1.16%.

Weekly August Comex Gold

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. Taking out $1238.80 last week signal a resumption of the downtrend. This puts the gold market in a position to challenge a pair of main bottoms at $1230.70 and $1228.20.

The minor trend is also down. The new minor trend top drops down from $1313.00 to $1266.90. A trade through $1266.90 will change the minor trend to up.

The main range is the contract range of $1158.40 to $1379.30. Its retracement zone at $1268.90 to $1242.80 is controlling the longer-term direction of the gold market. The close under the lower or Fib level at $1242.80 is helping to contribute to the downside bias.

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Weekly Technical Forecast

Based on last week’s close at $1241.80, the direction of the August Comex Gold futures contract is likely to be determined by trader reaction to the Fib level at $1242.80.

A sustained move under $1242.80 will indicate the presence of sellers. This could drive the market into the pair of bottoms at $1230.70 and $1228.20. If $1228.20 fails then look out to the downside since the next major bottom doesn’t come in until $1158.40.

A sustained move over $1242.80 will signal the presence of buyers. If this move creates enough upside momentum then look for a potential spike into a steep downtrending Gann angle at $1263.10, followed by the minor top at $1266.90 and the major 50% level at $1268.90. This market will have to clear $1268.90 to turn bullish.

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