Gold Price Futures (GC) Technical Analysis – Nearest Downside Target is 50% Level at $1383.30

The market is currently trading in between the $1442.90 main top and the short-term 50% level at $1383.30. Gold could become rangebound until the July 5 U.S. Non-Farm Payrolls report. Furthermore, July 4 is a U.S. holiday so volume could be extremely thin next week.
James Hyerczyk
Composition with 50 gram gold bar, banknotes and coins

Gold futures are trading lower late Thursday, but buyers have clawed back most of the earlier losses. Today’s low at $1401.40 came dangerously close to last Friday’s close at $1400.10. This means that sellers nearly wiped out all of this week’s earlier gains after the market hit a multi-year high on Tuesday.

At 19:25 GMT, August Comex gold is trading $1411.20, down $4.20 or -0.30%.

Uncertainty is driving prices lower. Uncertainty over whether the Fed will cut rates at its next meeting at the end of July, and uncertainty over whether President Trump and Chinese President Xi Jinping will walk away from their meeting at this week’s G-20 summit with a handshake agreement or maybe more to restart trade negotiations.

Daily August Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1442.90 will signal a resumption of the uptrend. After taking out the August 16, 2016 top at $1442.90, bullish traders are now facing additional resistance at the August 2, 2016 main top at $1447.10 and the July 6, 2016 main top at $1457.90.

The trend will change to down on a trade through $1323.60. This is highly unlikely but there is room for a normal 50% to 61.8% retracement.

The short-term range is $1323.60 to $1442.90. Its retracement zone at $1383.30 to $1369.20 is the first downside target. Since the main trend is up, buyers are likely to come in on a test of this zone.

The main range is $1274.60 to $1442.90. Its retracement zone at $1358.80 to $1338.90 is the primary downside target and the zone that is controlling the near-term direction of the market.

Daily Technical Forecast

The market is currently trading in between the $1442.90 main top and the short-term 50% level at $1383.30.

If the short-term downside momentum continues then look for the selling to expand into the 50% level at $1383.30. Since the main trend is up, buyers are likely to come in on a test of this level. If it fails then look for the selling to extend into the short-term Fibonacci level at $1369.20.

If buyers regain control then they may make a run at $1442.90. However, this isn’t likely to take place unless yields start to fall again or the U.S. Dollar weakens.

Overview

Gold could become rangebound until the July 5 U.S. Non-Farm Payrolls report. Furthermore, July 4 is a U.S. holiday so volume could be extremely thin next week.

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