Gold Price Futures (GC) Technical Analysis – Bulls Eyeing Fib Level at $1822.60 for Potential Breakout
Gold futures are making a late session surge on Friday after holding a key support area for a second straight session. Traders seem to be ignoring the stronger U.S. Dollar and hawkish comments by Fed officials. Instead they may be reacting to a dip in U.S. Treasury yields or a shift in the odds to a possible 50 basis point rate hike in by the Fed in September.
On the bullish side of the equation, U.S. Treasury yields dipped as investors evaluated whether an apparent slowdown in inflation increases could prevent the Fed from front-loading interest rate hikes.
On the bearish side, the dollar jumped after U.S. consumer sentiment ticked higher in August from a record low this summer and American households’ near-term outlook for inflation eased again on softening gasoline prices.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $1824.60 will signal a resumption of the uptrend. A move through $1727.00 will change the main trend to down.
The minor trend is also up. A trade through $1798.60 will change the minor trend to down. This will shift momentum to the downside.
The main range is $1900.80 to $1696.10. Gold has been trading inside its retracement zone at $1798.50 to $1822.60 for four straight sessions. It’s controlling the near-term direction of the market.
On the downside, the nearest support is a minor 50% level at $1776.20. This is followed by a short-term 50% level at $1760.40.
Trader reaction to the pivot at $1811.60 is likely to determine the direction of the December Comex gold futures contract into the close on Friday.
A sustained move over $1811.60 will indicate the presence of buyers. The first upside target is a Fibonacci level at $1822.60, followed by a minor top at $1824.60. The latter is a potential trigger point for an acceleration to the upside.
A sustained move under $1811.60 will signal the presence of sellers. The first downside target is a support cluster at $1798.60 – $1798.50. If this fails then look for the selling to possibly extend into $1776.20.