Gold Price Futures (GC) Technical Analysis – Big Decision for Bulls on Test of $1383.30 to $1369.20

Gold futures gapped lower early Monday and held on to most of the losses the entire session although there was very little follow-through to the downside after the initial plunge. The selling pressure is being driven by higher Treasury yields. They in turn are making the U.S. Dollar a more attractive investment, while reducing foreign demand for dollar-denominated gold.

At 17:06 GMT, August Comex gold is trading $1389.90, down $23.80 or -1.68%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has shifted to the downside. A trade through $1442.90 will signal a resumption of the uptrend. The main trend will change to down on a move through $1323.60.

The minor trend is down. It turned down earlier today when sellers took out the previous minor bottom at $1401.40. This move shifted momentum to the downside. A trade through $1427.80 will shift momentum back to the upside.

The short-term range is $1323.60 to $1442.90. Its retracement zone at $1383.30 to $1369.20 is the first downside target. Since the main trend is up, buyers could come in on the first test of this retracement zone.

The main range is $1274.60 to $1442.90. Its retracement zone at $1358.80 to $1338.90 is controlling the longer-term direction of the market. This is the best value area and the last major support before the main bottom at $1323.60.

Daily Technical Forecast

Based on today’s price action, the direction of the August Comex gold futures contract into the close is likely to be determined by trader reaction to the uptrending Gann angle at $1386.60.

Bullish Scenario

A sustained move over $1386.60 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a rally into the downtrending Gann angle at $1410.90.

Bearish Scenario

A sustained move under $1386.60 will signal the selling is getting stronger. The first target is the short-term 50% level at $1383.30. This is followed by the short-term uptrending Gann angle at $1379.60. This is a potential trigger point for an acceleration to the downside with the next target the short-term Fibonacci level at $1369.20.