Gold Price Futures (GC) Technical Analysis – Needs to Clear $1315.60 for Upside Breakout

Gold futures finished higher on Wednesday, but inside the previous day’s range. This indicates investor indecision and impending volatility. The indecision is being fueled by mixed fundamentals.

August Comex Gold futures settled at $1306.50, up $2.40 or +0.18%.

Geopolitical concerns and a weaker dollar may have helped underpin gold on Wednesday. Traders are watching the political turmoil in Italy unfold and U.S. Treasury yields which have fallen sharply this week. These are potentially bullish events.

Yesterday, increased demand for higher risk assets and commodities helped drive the U.S. Dollar lower. This may have helped underpin gold prices. However, investors are still concerned about the hawkish Fed and the possibility of more rate hikes later this year. This may be keeping a lid on the market.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is close to turning higher.

The minor trend is also down. A trade through $1312.60 will change the minor trend to up. This will shift momentum to the upside. A move through $1296.60 will indicate the return of sellers.

The market is currently trading inside a major retracement zone, bounded by $1300.60 on the downside and $1315.60 on the upside. This zone is controlling the longer-term direction of the market.

The short-term range is $1286.80 to $1312.60. Its retracement zone at $1309.60 to $1315.00 is the first upside target. This zone acted like resistance last week, stopping the rally at $1312.60.

The combination of the two retracement zones creates a potential resistance cluster at $1315.00 to $1315.60.

Daily Swing Chart Technical Forecast

Based on Wednesday’s price action, the direction of the gold market on Thursday is likely to be determined by trader reaction to the major Fibonacci level at $1300.60.

A sustained move over $1300.60 will signal the presence of counter-trend buyers. This could fuel a rally into the 50% level at $1309.60. Look for sellers on the first test of this level. Overtaking this level cold trigger a move into $1312.60 then the resistance cluster at $1315.00 to $1315.60.

Since the main trend is down, sellers could come in on a test of $1315.00 to $1315.60. However, if they can take it out then look for the gold market to accelerate to the upside. The daily chart indicates there is plenty of room to the upside with the next target $1332.40.

The inability to overtake or sustain a move over $1309.60 will indicate the presence of sellers. This could lead to a test of $1300.60. Taking out this level will mean the selling is getting stronger with targets coming in at $1296.60, $1292.00 and $1286.80.