Gold Price Futures (GC) Technical Analysis – Finishes Near 31-Month Low Ahead of Non-Farm Payrolls report.

Gold futures are trading lower late in the session on Thursday after testing its lowest level since April 1, 2020 earlier in the day. The selling was driven by a jump in Treasury yields and a stronger U.S. Dollar. They both moved higher on the back of hawkish remarks from Federal Reserve Chair Jerome Powell on Wednesday.

At 20:00 GMT, December Comex gold futures are trading $1632.80, down $17.20 or -1.04%. The SPDR Gold Shares ETF (GLD) settled at $151.81, down $0.58 or -0.38%.

The Fed raised interest rates by 75 basis points on Wednesday as expected. Powell said it was “very premature” to think about pausing and that the peak for rates would likely be higher than previously expected.

In my opinion, other than a periodic short-covering rally, gold has almost zero chance of mounting a strong rally in terms of price and time until the Fed stops raising rates and that may not happen until July 2023.

Traders are now bracing for Friday’s U.S. Non-Farm Payrolls report that could have a major influence on the size of the Fed’s December rate hike along with next week’s consumer inflation data. The U.S. Labor Department report is expected to show the economy added 197K new jobs in October.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. On Thursday, the downtrend was reaffirmed when sellers took out a pair of swing bottoms at $1633.60 and $1621.10. A trade through $1673.10 will change the main trend to up, while a move through $1679.40 will reaffirm the uptrend.

The major support is a price cluster created by the April 1, 2020 main bottom at $1618.00 and the long-term Fibonacci level at $1609.30. The latter is also a trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at $1648.90 is likely to determine the direction of the December Comex gold futures contract early Friday.

Bearish Scenario

A sustained move under $1648.90 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to extend into the support cluster at $1618.30 to $1618.00. Taking out the latter will put $1609.30 on the radar. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over $1649.00 will signal the presence of buyers. This could trigger a short-covering rally into a main top at $1673.10, followed by the resistance cluster at $1678.50 – $1679.40.