Gold Price Futures (GC) Technical Analysis – Drifts Lower Ahead of US Retail Sales, Fed Minutes

Gold futures edged lower on Tuesday as Treasury yields moved higher ahead of Wednesday’s U.S. Retail Sales report and the Federal Reserve’s July meeting minutes.

Retail sales will reveal to the Fed the strength of consumer spending in an economy that according to some is headed into recession. The Fed minutes will likely provide clues about the central bank’s future interest rate moves.

Gold could get hit hard on Wednesday if the retail sales are strong and the Fed minutes are hawkish.

On Tuesday, December Comex gold futures settled at $1789.70, down $8.40 or -0.47%. The SPDR Gold Shares ETF (GLD) finished at $165.45, down $0.26 or -0.16%.

U.S. economic data came in mixed with a report from the Commerce Department showing U.S. Industrial Production increased in July following a revised unchanged reading in June. The number came in better than the forecast.

Data from the Commerce Department showed a plunge in housing starts, worse than the estimate. Building Permits, an indicator of future housing demand, also declined, but less than the forecast.

Daily Swing Chart Technical Analysis

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

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 down. This is controlling the momentum. A trade through $1819.10 will change the minor trend to up.

The main range is $1900.80 to $1696.10. The market closed on the weak side of its retracement zone at $1798.50 to $1822.60, making it resistance.

The minor range is $1727.00 to $1824.60. Its 50% level at $1776.20 is the nearest target. The short-term 50% target is $1760.40.

Daily Swing Chart Technical Forecast

Trader reaction to $1798.50 is likely to determine the direction of the December Comex gold futures contract early Wednesday.

Bearish Scenario

A sustained move under $1798.50 will indicate the presence of sellers. If this move creates enough downside momentum then look for a move into $1776.20, followed by the minor bottom at $1770.00. If this fails then look for the selling to possibly extend into the pivot at $1760.40.

Bullish Scenario

A sustained move over $1798.50 will signal the presence of buyers. If this generates enough upside momentum then look for a surge into the resistance cluster at $1822.60 to $1824.60. The latter is a potential trigger point for an acceleration to the upside.