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James Hyerczyk
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Gold

Gold is trading slightly better late Monday but its performance can best be described as mixed. The choppy, two-sided trade is being fueled by similar moves in the safe-haven U.S. 10-year Treasury note and the U.S. Dollar against a basket of major currencies. The market opened on its high, but has since then spent most of the session struggling to stay positive.

At 18:38 GMT, August Comex gold is trading $1781.20, up $0.90 or +0.05%.

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Gold was supported earlier in the session after data compiled by Johns Hopkins University showed more than 2.5 million COVID-19 cases have been confirmed in the U.S, raising concerns that the economic recovery would take longer than previously anticipated.

Gold retreated from its high as investors took solace in the fact that the acceleration in infection numbers is not yet leading to a marked rise in fatalities.

Thin pre-report and pre-holiday volume may have contributed to the somewhat confusing price action. On Thursday, the U.S. releases its June Non-Farm Payrolls report and Friday is a bank holiday. What’s confusing? Well gold usually rallies when interest rates fall and it usually falls when the U.S. Dollar rises. On Monday, the moves were offsetting so traders didn’t have enough conviction to move the market in either direction.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, upside momentum has been waning since the formation of the closing price reversal top on June 24. A trade through $1796.10 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through $1754.00.

The minor range is $1796.10 to $1754.00. Its 50% level or pivot at $1775.10 is controlling the price action on Monday.

The short-term range is $1671.70 to $1796.10. If the main trend changes to down then look for a break into its 50% level at $1733.90.

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Short-Term Outlook

Late Monday, gold is holding above the minor pivot at $1775.10 and a steep uptrending Gann angle at $1770.00. In order to maintain the two-day upward pace, the market is going to have to jump to at least $1786.00 into the close, or hold the pivot level.

On the upside, the two key targets are the contract high at $1796.10 and an uptrending Gann angle at $1799.70. Crossing to the strong side of the uptrending Gann angle will put gold in an extremely bearish position.

Under the pivot at $1775.10 are additional Gann angles at $1762.00 and $1758.00. The latter is the last potential support angle before the $1754.00 main bottom.

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