Gold Price Futures (GC) Technical Analysis – Needs to Hold $1328.70 into Close

Gold futures spiked to their highest level since February 21 on Wednesday, helped by a weaker U.S. Dollar, which drove up foreign demand for the dollar-denominated asset. The dollar was pressured by expectations of a sooner than expected rate cut by the Fed after Chairman Jerome Powell on Tuesday hinted the central bank could ease monetary policy to help alleviate the pressure on the economy being caused by trade tensions.

At 14:55 GMT, August Comex gold futures are trading $1336.00, up $7.30 or +0.56%. This is down from an intraday high of $1349.90.

After early session strength, gold spiked to is high for the session after the release of a weaker-than-expected U.S. ADP private sector jobs report. Since then, gold has been pressured by a slowly strengthening U.S. Dollar. The direction of the dollar the rest of the session will likely determine the direction of gold into the close. If the dollar posts a reversal to the upside then the odds are strong that gold will produce a reversal to the downside.

Daily Technical Analysis

The main trend is up according to the daily swing chart. Today’s rally fell short of the swing top at $1361.50. A trade through this level will reaffirm the uptrend.

The main trend will change to down on a trade through $1274.60. This is highly unlikely, but the 10-day rally has put the market inside the window of time for a closing price reversal top.

The main range is $1413.30 to $1202.00. Its retracement zone is $1332.60 to $1307.70. This zone is controlling the longer-tern direction of the market. Holding above this zone will give the market an upside bias. Holding inside this zone will create a neutral tone, while falling below $1307.70 will signal increasing selling pressure.

Daily Technical Forecast

Based on the early price action and the current price at $1336.00, the direction of the August Comex gold futures contract into the close is likely to be determined by trader reaction to the main Fibonacci level at $1332.60.

Bullish Scenario

A sustained move over $1332.60 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of the downtrending Gann angle at $1343.30. Overtaking this angle could lead to a retest of the intraday high at $1348.90.

Taking out $1348.90 will indicate the buying is getting stronger. This could trigger a move into the next downtrending Gann angle at $1352.40. This is the last potential resistance angle before the $1361.50 main top.

Bearish Scenario

A sustained move under $1332.60 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the downtrending Gann angle at $1325.00. If this fails then look for the selling to possibly extend into the steep uptrending Gann angle at $1314.60.

Overview

The key to the near-term direction of gold is whether or not the market posts a higher or lower close today. A lower close will produce a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day correction or at least 50% of the last rally.