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.

At 18:58 GMT, December Comex gold futures are trading $1816.80, up $9.60 or +0.53%. The SPDR Gold Shares ETF (GLD) is at $167.86, up $1.52 or +0.91%.

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.

Short-Term Outlook

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.

Bullish Scenario

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.

Bearish Scenario

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.