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Gold Price Futures (GC) Technical Analysis – Still Trading on Strong Side of Long-Term 50% Level at $1844.00

By:
James Hyerczyk
Published: May 25, 2022, 18:46 UTC

Trader reaction to $1854.80 will likely determine the direction of the June Comex gold futures contract into the close on Wednesday.

Comex Gold

In this article:

Gold futures are trading sharply lower late in the session on Wednesday after the Fed minutes revealed officials earlier this month stressed the need to raise interest rates quickly and possibly more than markets anticipate to tackle a burgeoning inflation problem, meeting minutes released at 18:00 GMT showed.

Not only did policymakers see the need to raise benchmark borrowing rates by 50 points, but they also said similar hikes likely would be necessary at the next several meetings.

At 18:10 GMT, August Comex gold futures are at $1855.60, down $15.80 or -0.84%. The SPDR Gold Shares ETF (GLD) is trading $172.75, down $1.38 or -0.79%.

“Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings,” the minutes stated.

In addition, Federal Open Market Committee members indicated that “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.’

Fed Minutes Analysis

In my opinion, the minutes are stale data. Traders are already looking forward with the emphasis on the strength of the economy and whether it can withstand a series of aggressive Fed rate hikes. Weak economic news could encourage policymakers to lighten the tone a little, giving gold a little support.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $1917.60 will change the main trend to up. A move through $1792.00 will signal a resumption of the downtrend.

The minor trend is up. This is driving the momentum. A trade through $1811.70 will change the minor trend to down. A move through the minor top at $1875.00 will strengthen the trend.

On the downside, the support is a series of retracement levels at $1854.80, $1844.00, $1833.50 and $1823.70. The most important level is the long-term Fibonacci level at $1844.00.

On the upside, the nearest resistance is a pair of 50% levels at $1890.00 and $1900.30.

Daily Swing Chart Technical Forecast

Trader reaction to $1854.80 will likely determine the direction of the June Comex gold futures contract into the close on Wednesday.

Bullish Scenario

A sustained move over $1854.80 will indicate the presence of buyers. If this can create enough upside momentum then look for a late session surge into $1875.00.

Overtaking $1875.00 could trigger an acceleration into $1890.00 – $1900.30.

Bearish Scenario

A sustained move under $1854.80 will signal the presence of sellers. This could lead to a test of $1844.00. Counter-trend buyers could come in on a test of this level. If it fails, the selling could possibly extend into the short-term pivot zone at $1833.50 – $1823.70.

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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