Gold Price Futures (GC) Technical Analysis – Price Action Suggests Specs Still Betting on Aggressive Fed

Gold futures are edging higher shortly before the close on Friday. Volume and volatility are low despite the better-than-expected U.S. Advance GDP report and the spike in the upside by the U.S. Dollar. Traders seem to be paying more attention to Treasury yields today, which are trading flat as investors start to position themselves ahead of the U.S. Federal Reserve monetary policy and interest rate decisions on July 31.

At 15:25 GMT, December Comex gold is trading $1429.90, up $2.40 or +0.17%.

The market is also trading inside yesterday’s trading range which suggests investor indecision and impending volatility.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on July 19 at $1467.00.

A trade through $1467.00 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 $1413.70.

The minor trend is down. This confirms the shift in momentum to the downside. A trade through $1447.00 will change the minor trend to up.

The short-term range is $1396.40 to $1467.00. Its retracement zone at $1431.70 to $1423.40 is providing support on Friday. Trader reaction to this zone should set the tone into the close.

The intermediate range is $1335.10 to $1467.00. If the main trend changes to down then look for a pullback into its retracement zone at $1401.10 to $1385.50.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the current price at $1429.90, the direction of the December Comex gold futures market into the close will be determined by trader reaction to the 50% level at $1431.70 and the Fibonacci level at $1423.40.

Bullish Scenario

A sustained move over $1431.70 will indicate late session buyers. This could push the market toward the minor top at $1431.70.

Bearish Scenario

A sustained move under $1423.40 will signal the presence of late session sellers. Taking out this level could spike prices to the downside with the next target the main bottom at $1413.70.

Overview

Holding inside $1431.70 to $1423.40 will indicate a neutral close. I’m really surprised at the price action today and the reaction to the stronger GDP data and the spike by the U.S. Dollar to a new high for the year. This may be a sign that there are strong buyers in there, perhaps betting on a more aggressive Federal Reserve next Wednesday.