Gold Price Futures (GC) Technical Analysis – $1780.90 is Key Pivot; Trade Through $1767.90 Shifts Momentum

Gold futures are edging higher on Thursday shortly before the regular session opening and the release of the U.S. Non-Farm Payrolls report at 12:30 GMT. The report carries a lot of risk so the price action is likely being fueled by position-squaring.

Some aggressive traders may be trying to claw back Wednesday’s losses following a dramatic sell-off in reaction to a stronger than expected jobs report, solid manufacturing data and promising results from a COVID-19 vaccine trial.

At 10:23 GMT, August Comex gold is trading $1784.60, up $4.70 or +0.26%.

Longer-term, the case for the bull market to continue remains intact, however, the short-term pro-growth stance is capping gains. Like I mentioned earlier in the week, most of the recent gains in gold have come from buying dips rather than chasing highs. So a short-term pullback should be welcomed by longer-term bulls.

Today’s U.S. Non-Farm Payrolls report could offer clues about the health of the economy. Traders are looking for the report to show the economy added about 3 million jobs in June.

Gold could plunge further if the number comes in higher than expected, however, losses could be limited because of concerns that a second-wave of coronavirus infections could lead to job losses in July and August. Gold could firm if the report comes in below expectations since this would increase the odds of further support from the government and Federal Reserve.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum could shift to the downside if yesterday’s closing price reversal top is confirmed by a break through Wednesday’s low.

A trade through $1807.70 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through the last main bottom at $1754.00.

The minor range is $1754.00 to $1807.70. Its 50% level or pivot at $1780.90 is controlling the near-term direction of the market.

The short-term range is $1671.70 to $1807.70. If the main trend changes to down then its 50% level at $1739.70 will become the next downside target.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $1784.60, the direction of the August Comex gold futures contract on Thursday is likely to be determined by trader reaction to the 50% level at $1780.90.

Bullish Scenario

A sustained move over $1780.90 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly lead to a retest of yesterday’s high at $1807.70. Taking out this level will negate the closing price reversal top.

Bearish Scenario

A sustained move under $1780.90 will signal the presence of sellers. Taking out yesterday’s low at $1767.90 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction, or even a change in trend.

The first downside target is $1754.00. A trade through this price will change the main trend to down, leading to a test of the 50% level at $1739.70.

Buyers could come in on the first test of $1739.70, but if it fails then look for a possible acceleration to the downside.