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Gold Price Futures (GC) Technical Analysis – Selling Subsides After Less-Hawkish Fed Minutes

By:
James Hyerczyk
Updated: Aug 17, 2022, 20:43 UTC

This less-hawkish Fed minutes may have stopped the selling on Wednesday, setting up the possibility of a short-term retracement to the upside.

Comex Gold

In this article:

December Comex gold futures are trading lower late in the session on Wednesday shortly after the release of the Fed’s July meeting minutes. The market had been under pressure all session due to higher Treasury yields and a stronger U.S. Dollar, but both eased a little following the release of the minutes.

Some are saying there could be a technical bounce higher into the close because the minutes were less-hawkish than expected. According to the CME’s FedWatch Tool, the probability of a 75-basis-point rate hike in September moved down to 38.5% from 61.5% earlier today. The probability of a 50-basis-point rate hike rose from 38.5% to 61.5%.

At 19:36 GMT, December Comex gold futures are trading $1780.90, down $8.80 or -0.49%. The SPDR Gold Shares ETF (GLD) is at $164.36, down $1.06 or -0.64%.

The Fed minutes showed that the Federal Reserve would continue its aggressive hiking campaign until it can tame inflation. At the same time, Fed policymakers also indicated that it could soon slow the pace of its tightening, while also acknowledging certain weakness in parts of the economy and risk to the downside for GDP growth.

This less-hawkish Fed minutes may have stopped the selling on Wednesday, setting up the possibility of a short-term retracement to the upside. However, gold traders will turn to Treasury yields and the U.S. Dollar for guidance.

Daily December 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 $1824.60 will signal a resumption of the uptrend. A move through $1727.00 will change the main trend to down.

The minor trend is down. This is controlling the momentum. A trade through the nearest minor bottom at $1770.00 will reaffirm the trend.

On the downside, the nearest support is a pair of 50% levels at $1776.20 and $1760.40. On the upside, the nearest resistance is the short-term retracement zone at $1798.50 to $1822.60.

Daily Swing Chart Technical Forecast

Trader reaction to the pivot at $1776.20 is likely to determine the direction of the December Comex gold futures contract into the close on Wednesday.

Bullish Scenario

A sustained move over $1776.20 will indicate the presence of buyers. If this creates enough upside momentum then look for a late-session surge into the short-term 50% level at $1798.50.

Bearish Scenario

A sustained move under $1776.20 will signal the presence of sellers. This could lead to a test of the pivot at $1760.40. This price is a potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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