Gold Price Futures (GC) Technical Analysis – Break Through $1384.70 Changes Trend to Down

Gold futures are trading lower early Wednesday as investors await the start of two days of Congressional testimony from Federal Reserve Chairman Jerome Powell on Wednesday and Thursday. Later in the session, investors will get the opportunity to react to the minutes from the Fed’s June 18-19 monetary policy meeting.

At 05:14 GMT, August Comex gold is trading $1394.50, down $6.00 or -0.43%.

The price action so far this week has been sideways to lower. The weakness has been driven by rising Treasury yields, which have made the U.S. Dollar an attractive investment, while driving down foreign demand for dollar-denominated gold.

Essentially, gold could rally if Powell is dovish, and it could plunge if he comes across as hawkish about the economy, while pushing a rate cut further into the future.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower.

A trade through $1384.70 will change the main trend to down. The next downside target would become $1323.60. A move through the pair of tops at $1441.00 to $1442.90 will signal a resumption of the uptrend.

The minor range is $1442.90 to $1384.70. Its 50% level or pivot at $1413.80 is controlling the near-term direction of the market.

The intermediate range is $1323.60 to $1442.90. Its retracement zone at $1383.30 to $1369.20 is potential support.

The main range is $1274.60 to $1442.90. If the main trend changes to down then its retracement zone at $1358.80 to $1338.90 will become the primary downside target. Buyers could step in on the first test of this zone.

Daily Swing Chart Technical Forecast

Based on this week’s price action and the current price at $1394.50, the direction of the August Comex gold market on Wednesday is likely to be determined by trader reaction to the main bottom at $1384.70 and the intermediate 50% level at $1383.30.

Bullish Scenario

Holding $1384.70 will indicate that buyers are coming in to defend the uptrend. If successful, this could drive prices into the pivot at $1413.80. Overtaking this level could trigger an acceleration to the upside with targets coming in at $1441.00 to $1442.90.

Bearish Scenario

Taking out $1384.70 will change the main trend to down. A drive through $1383.30 will indicate the selling is getting stronger. This could trigger a break into the Fibonacci level at $1369.20, followed by the main 50% level at $1358.80 and the main Fibonacci level at $1338.90.