Gold Price Futures (GC) Technical Analysis – Rangebound Ahead of Powell’s Testimony Later This Week

Gold futures are easing higher on Tuesday in reaction to a dip in U.S. Treasury yields and the U.S. Dollar. The volume is a little on the light side after Monday’s U.S. bank holiday so we’re not going to read into the move too much.

At the start of the week, bullish traders are looking for signs of recession, while bearish traders are keeping steady pressure on prices on the hopes of continued rate hikes from hawkish central bankers. Despite these outlooks, however, the directions of yields and the dollar will ultimately determine which way and how fast the gold market moves.

At 07:56 GMT, August Comex gold futures are trading $1841.20, up $0.50 or +0.03%. On Monday, the SPDR Gold Shares ETF (GLD) settled at $171.26, down $1.43 or -0.83%.

Fed Speakers Likely Source of Volatility This Week

In the absence of major economic reports, gold traders will be seeking direction this week from a number of Federal Reserve representative. On Wednesday, Fed Chair Jerome Powell will deliver a semi-annual monetary policy testimony before the Senate Banking Committee. On Thursday, his testimony will be before the House Financial Services Committee.

Fed’s Bullard:  No Pain, No Gain

On Monday, St. Louis Fed President James Bullard said the U.S. Federal Reserve could raise interest rates swiftly this year and forge a “stellar” economy ahead if it can pull off a repeat of the success of the central bank’s 1994 tightening cycle, Reuters reported.

“That tightening episode caused some disruption that year,” Bullard said during an event held by the AXA-Barcelona School of Economics in Barcelona, Spain. “However, I have always felt that set up the U.S. economy for a stellar performance in the second half of the 1990s … I hope we can get something like that this time.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1806.10 will signal a resumption of the downtrend. A move through $1882.50 will change the main trend to up.

The minor trend is also down. A trade through $1861.50 will change the minor trend to up. This will shift momentum to the upside.

On the upside, the key resistance is the long-term Fibonacci level at $1844.00. This is followed by a short-term 50% level at $1854.80.

On the downside, the short-term support range is $1837.30 to $1826.60.

Daily Swing Chart Technical Forecast

Trader reaction to the long-term Fibonacci level at $1844.00 is likely to determine the direction of the August Comex gold futures contract on Tuesday.

Bearish Scenario

A sustained move under $1844.00 will indicate the presence of sellers. This is followed by short-term retracement levels at $1837.30 and $1826.60. This are the last potential support levels before the $1806.10 main bottom.

Bullish Scenario

A sustained move over $1844.00 will signal the presence of buyers. This could trigger a surge into $1854.80 and $1861.50.

Taking out the minor top at $1861.50 could trigger an acceleration into the main top at $1882.50.