Gold Price Futures (GC) Technical Analysis – Sellers Looking to Extend Pressure Under Major 50% Level at $1280.80

Based on the early price action, the direction of the August Comex gold futures contract on Thursday is likely to be determined by trader reaction to the minor pivot at $1283.60.
James Hyerczyk
Comex Gold

Gold settled higher on Thursday, but well-off its high and the highs of the week for that matter as another attempt to breakout to the upside was thwarted by a stronger U.S. Dollar. Underpinning the market was another plunge in U.S. Treasury yields and lower demand for higher risk assets, but this was not enough to attract the buying needed to trigger a surge through resistance. Gold may become rangebound over the short-run, but it’s not likely to breakout to the upside unless the dollar weakens.

On Wednesday, August Comex gold futures settled at $1286.30, up $3.80 or +0.30%. At 04:14 GMT, the futures contract is trading $1282.20, down $4.10 or -0.32%.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $1274.60 will change the main trend to down. A move through $1273.20 will reaffirm the downtrend. This could trigger an acceleration to the downside. A move through $1310.10 will signal a resumption of the uptrend.

The minor range is $1274.60 to $1292.50. Its 50% level or pivot is $1283.60.

The short-term range is $1310.10 to $1274.60. Its retracement zone at $1292.40 to $1296.50 is resistance.

On the downside, the major support is a retracement zone at $1280.80 to $1261.70. The last two bottoms at $1274.60 to $1273.20 were formed inside this zone, just under the 50% level at $1280.80.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the August Comex gold futures contract on Thursday is likely to be determined by trader reaction to the minor pivot at $1283.60.

Bearish Scenario

A sustained move under $1283.60 will indicate the presence of sellers. The first target is the major 50% level at $1280.80. Look for the selling pressure to increase if this level fails. This could trigger a further decline into the minor bottom at $1274.60 and the main bottom at $1273.20. The latter is a potential trigger point for an acceleration to the downside with $1261.70 the next major target.

Bullish Scenario

A sustained move over $1283.60 will signal the presence of buyers. This will also indicate a successful defense of the retracement zone at $1274.60 and $1273.20. If this can create enough upside momentum then look for the rally to possibly extend into $1292.40 to $1292.50.

Taking out $1292.50 could trigger a further surge into $1296.50 then last year’s close at $1300.20.

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