Gold Price Futures (GC) Technical Analysis – Low Volatility Combined with Stronger Dollar Pressuring Prices

Gold futures are trading lower at the mid-session on Tuesday, however, volume and volatility remain on the low side for the third straight session. The market is also trading inside its July 11 range for a third day, which tends to indicate investor indecision and impending volatility.

Underpinning the market are expectations of a Fed rate cut at the end of the month. Putting a lid on prices today are higher Treasury yields and a stronger U.S. Dollar. Both are making gold an undesirable investment. The catalyst behind the price action is a steep decline in the Euro and better-than-expected U.S. retail sales data.

At 15:54 GMT, August Comex gold is trading $1409.90, down $3.60 or -0.25%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The market will strengthen on a trade through $1429.40, but taking out $1441.00 and $1442.90 will signal a resumption of the uptrend.

The main trend will change to down on a trade through $1387.50. Taking out $1384.70 could trigger an acceleration to the downside with the next main bottom coming in at $1323.60.

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

The intermediate range is $1323.60 to $1442.90. If the main trend is down, its retracement zone at $1383.30 to $1369.20 will become the primary downside target.

The main range is $1274.60 to $1442.90. If the intermediate range fails as support then look for the selling to extend into the main retracement zone at $1358.80 to $1338.90.

Daily Technical Forecast

Based on the early price action, and the current price at $1409.90, the direction of the August Comex gold futures contract into the close is likely to be determined by trader reaction to the uptrending Gann angle at $1407.50.

Bearish Scenario

A sustained move under $1407.50 will indicate the selling pressure is getting stronger. This could trigger a break into the next uptrending Gann angle at $1397.50. This is the last potential support angle before the main bottoms at $1387.50 and $1384.70, and the intermediate 50% level at $1383.30. The latter is the trigger point for an acceleration into the intermediate Fibonacci level at $1369.20.

Bullish Scenario

A sustained move over $1407.50 will signal the return of buyers. This could lead to a labored rally with resistance layered at $1413.80, $1414.90 and $1419.60.