Gold Price Futures (GC) Technical Analysis – August 2, 2018 Forecast

Gold prices are under pressure on Thursday and in a position to take out the July low amid flight-to-safety buying in the U.S. Dollar. This is leading to a drop in demand from foreign investors for the dollar-denominated asset.

At 1200 GMT, December Comex gold is trading $1226.50, down $5.00 or -0.41%.

A sell-off in the U.S. stock indexes due to renewed concerns over the escalating trade dispute between the U.S. and China is sending money into the safety of the U.S. Dollar. If this continues throughout the day then look for gold to make a new multi-year low.

Yesterday’s hawkish U.S. Federal Reserve monetary policy statement, which indicates the central bank is likely to raise rates at least two more times this year, is also keeping a lid on gold prices and encouraging some selling of the non-interest-paying asset.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1221.00 will signal a resumption of the downtrend. This could trigger an acceleration to the downside since the next main bottom is $1169.00. The main trend will change to up on a move through $1244.70.

The minor trend is also down. A trade through $1237.80 will change the minor trend to up.

The short-term range is $1221.00 to $1244.70. Its 50% level or pivot is controlling the direction of the market today.

The main range is $1278.20 to $1221.00. If the trend changes to up then its retracement zone at $1249.60 to $1256.40 becomes the next upside target.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the December Comex gold market is likely to be determined by trader reaction to the 50% level at $1232.90.

A sustained move under $1232.90 will indicate the presence of sellers. Taking out $1222.60 will indicate the selling is getting stronger. Breaking through $1221.00 will signal a resumption of the downtrend. This could trigger a steep plunge. The daily chart shows there is plenty of room to the downside with the next major target $1169.00.

Holding $1221.00 will signal the presence of buyers. This move will be meaningless, however, unless buyers can overcome the pivot at $1232.90. If this occurs then look for a stair-step rally with potential resistance levels at $1237.80, $1244.60 and $1244.70.

Look for the trend to change to up on a move over $1244.70, but also watch for sellers to return on a test of $1249.60 to $1256.40.