Gold Price Futures (GC) Technical Analysis – Pressured by Fed’s Hawkish Rate Hike Expectations

Gold futures fell on Friday while posting its fourth straight weekly loss. The dollar-denominated asset finished lower despite a drop in the U.S. Dollar against a basket of major currencies. However, higher U.S. interest rates weighed on the precious metal as they raised the opportunity cost of holding a non-yielding asset.

On Friday, June Comex gold settled at $1808.20, down $16.40 or -0.90%. The SPDR Gold Shares ETF (GLD) closed at $168.81, down $1.36 or -0.80%.

“Gold is being weighed down as the Fed has been committed to raise interest rates at a fast pace and in addition, the dollar has been extremely strong,” said David Meger, director of metals trading at High Ridge Futures.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1797.20 will signal a resumption of the downtrend. A move through $1910.70 will change the main trend to up.

The minor trend is also down. A trade through $1858.80 will change the minor trend to up. This will shift momentum to the upside.

The minor range is $1910.70 to $1797.20. Its pivot at $1854.00 is the nearest resistance.

The key resistance is a short-term Fibonacci level at $1897.70, followed by a price cluster at $1908.10 – $1910.70.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract early Monday is likely to be determined by trader reaction to $1812.40.

Bearish Scenario

A sustained move under $1812.40 will indicate the presence of sellers. If this create enough downside momentum then look for a retest of $1797.20, followed by a pair of bottoms at $1791.60 and $1783.80.

Bullish Scenario

A sustained move over $1812.40 will signal the presence of buyers. If this generates enough upside momentum, we could see a short-term rally into the pivot at $1824.40, followed closely by the minor top at $1858.80.

The latter is a potential trigger point for an acceleration into 1897.70 to $1910.70.