Gold Price Futures (GC) Technical Analysis – Rangebound with Slight Bias to the Downside Ahead of ADP Report

Gold futures are trading lower early Wednesday, pressured by rising U.S. Treasury yields, which are helping make the U.S. Dollar a more attractive asset. The strong greenback is helping to reduce demand for the dollar-denominated asset.

Volume appears to be on the light side and the market rangebound as investors focused on Friday’s U.S. Non-Farm Payrolls report that would likely set the time table for the Federal Reserve’s tapering schedule, which is projected to begin in November. Friday’s U.S. jobs report is expected to show 488,000 jobs were added in September.

At 04:10 GMT, December Comex gold futures are trading $1754.50, down $6.40 or -0.36%.

On Wednesday, traders will have the opportunity to react to the latest ADP Non-Farm Employment Change report at 12:15 GMT. It is expected to show the private sector of the economy added 425,000 jobs.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $1788.40 will change the main trend to up. A move through $1721.10 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $1747.70 will change the minor trend to down.

Gold is being influenced by a number of retracement levels this week, leading to a choppy, two-sided trade.

On the upside, resistance comes in at $1757.40, $1765.90 and $1779.00.

On the downside, support is $1746.30 and $1738.60. The latter is a potential trigger point for an acceleration into the next support level at $1716.00.

Daily Swing Chart Technical Forecast

The direction of December Comex gold futures on Wednesday is likely to be determined by trader reaction to $1757.40.

Bearish Scenario

A sustained move under $1757.40 will indicate the presence of sellers. The first downside target is the 50% level in $1746.30. This level has held for two session.

Taking out $1746.30 will indicate the selling pressure is getting stronger with $1738.60 the next target. This is a potential trigger point for an acceleration into $1721.10 to $1716.00.

Bullish Scenario

A sustained move over $1757.40 will signal the presence of buyers. This could lead to a labored rally with potential targets lined up at $1765.90, $1771.50 and $1779.00. The latter is a potential trigger point for an acceleration into $1788.40, followed closely by $1795.00 and $1800.00.

Side Notes

Be careful buying strength or selling weakness because of the low volume. With many of the major players on the sidelines ahead of Friday’s NFP report, try not to force a trade. It’s easy to get trapped on false breakouts.