Gold Price Futures (GC) Technical Analysis – $1800.00 – $1828.80 Zone Controlling Near-Term Direction

Gold futures recovered from earlier weakness to close higher on Tuesday. The catalyst fueling the move was a weaker U.S. Dollar. Helping to cap prices were higher Treasury yields. Relatively low volume may have contributed to the two-sided trade as some investors took to the sidelines ahead of the August U.S. Non-Farm Payrolls report due on Friday.

On Tuesday, December Comex gold settled at $1818.10, up $5.90 or +0.33%.

Despite the choppy trade, gold is being underpinned by dovish comments from U.S. Federal Reserve Chair Jerome Powell at the Jackson Hole conference last Friday, when he did not give a firm timeline for the central bank to start trimming its bond asset purchases.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside on Tuesday with the confirmation of the previous session’s closing price reversal top.

A trade through $1826.50 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 $1781.30.

The minor trend is also up. The new minor top is $1826.50.

Gold is currently trading inside a major retracement zone at $1800.00 to $1828.80. This zone is controlling the near-term direction of the market.

The major long-term retracement zone support is $1795.00 to $1716.00.

Short-term retracement zone support is $1777.50 to $1758.50.

The most important support is the price cluster at $1800.00 to $1795.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures contract on Wednesday is likely to be determined by trader reaction to $1815.00.

Bullish Scenario

A sustained move over $1815.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into $1826.50 to $1828.80.

Look for sellers on the first test of $1828.80. Overtaking it, however, could trigger a surge into a pair of main tops at $1837.50 to $1839.00.

Bearish Scenario

A sustained move under $1815.00 will signal the presence of sellers. The first downside target is the support cluster at $1800.00 to $1795.00. Since the main trend is up, buyers are likely to come in on a test of this zone.

Taking out $1795 will put the market in a position to change the main trend to down.