Gold Price Futures (GC) Technical Analysis – Setting Up for Volatile Breakout

Gold is trading higher, but inside yesterday’s trading range. The price action indicates investor indecision and impending volatility. The market is also being boosted by a slight dip in the U.S. Dollar against a basket of currencies. The greenback is being pressured a little by U.S. Treasury yields.

Traders took protection about a possible quick end to the US-China trade dispute on Monday by selling gold aggressively, but comments by President Trump about additional tariffs on the European Union seem to have put an end to that.

At 14:54 GMT, August Comex gold is trading $1397.00, up $7.70 or +0.55%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has shifted to the downside. A trade through $1442.90 will signal a resumption of the uptrend. The main trend will change to down on a trade through $1323.60.

The minor trend is down. This is controlling the downside momentum. A trade through $1427.80 will change the minor trend to up.

The short-term range is $1323.60 to $1442.90. Its retracement zone at $1383.30 to $1369.20 is the first downside target. Since the main trend is up, buyers are likely to show up on a test of this area. They are going to try to form a secondary higher bottom.

The main range is $1274.60 to $1442.90. Its retracement zone at $1358.80 to $1338.90 is the most important support zone.

Daily Technical Forecast

Based on the early price action, the direction of the August Comex gold market the rest of the session is likely to be determined by trader reaction to a downtrending Gann angle at $1402.90 and an uptrending Gann angle at $1383.30. Trading in between will indicate a neutral trade.

Bullish Scenario

Taking out $1402.90 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next target angle coming in at $1422.90.

Bearish Scenario

A break down through $1383.30 will indicate the selling pressure is getting stronger. This will also break 50% support. Look for a potential acceleration into the Fibonacci level at $1369.20.

Overview

Gold is currently trading inside a triangle chart pattern. It indicates that $1395.00 will be the key level to watch on Wednesday.