Gold Price Futures (GC) Technical Analysis – Pivot at $1413.80 Controlling Market’s Direction
Gold futures are trading higher early Thursday, but backing off its high for the session. Prices soared on Wednesday after Treasury yields plunged, making the U.S. Dollar a less-attractive investment. The moves drove up foreign demand for dollar-denominated gold futures. The catalysts behind the price action were remarks from U.S. Federal Reserve Chairman Jerome Powell, which put a steep Fed rate cut back on the table.
At 06:23 GMT, August Comex gold futures are trading $1422.40, up $9.90 or +0.69%.
The minutes from the Fed’s June meeting were also released late Wednesday. The minutes showed that policymakers were more concerned about the economic outlook last month and indicated more Federal Open Market Committee (FOMC) members were leaning toward a rate cut if necessary.
Powell testifies before a House sub-committee later today. Traders aren’t sure what to expect from the Fed chief so they are holding prices in a tight range early in the session.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, lost upside momentum has been fueling a mostly sideways trade since June 25. The price action was being fueled by the lack of clarity from the Fed. Perhaps yesterday’s dovish comments from Powell will generate enough upside momentum to resume the uptrend.
Taking out the swing tops at $1441.00 and $1442.90 will signal a resumption of the uptrend, while a trade through $1387.50 to $1384.70 will change the main trend to down.
The short-term range is $1442.90 to $1384.70. Its 50% level or pivot at $1413.80 is controlling the early direction of the market on Thursday.
The intermediate range is $1323.60 to $1442.90. Its retracement zone at $1383.50 to $1369.40 is support. The last two main bottoms stopped just above this zone.
The main range is $1274.60 to $1442.90. Its retracement zone at $1358.80 to $1338.90 is controlling the longer-term direction of the market.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at $1422.40, the direction of the August Comex gold futures contract on Thursday is likely to be determined by trader reaction to the short-term pivot at $1413.80.
A sustained move over $1422.40 will indicate the presence of buyers. If they are able to generate enough upside momentum then look for the rally to possibly extend into the two main tops at $1441.00 and $1442.90. The latter is the trigger point for an acceleration to the upside.
A sustained move under $1413.80 will signal the return of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the nearest main bottom at $1387.50, followed by the next main bottom at $1384.70 and the intermediate 50% level at $1383.50.
The gold market will start to open up to the downside under $1383.50 with nearby targets coming in at $1369.40 and $1358.80.