Gold Price Futures (GC) Technical Analysis – Straddling Pair of 50% Levels at $1795.00 and $1800.00

Gold futures are inching higher late in the session on Monday, underpinned by lower Treasury yields, but capped by a stronger U.S. Dollar. Volume is well below average with most of the major players on the sidelines ahead of the release of U.S. consumer inflation data on Tuesday. The reading could dictate the direction of the Federal Reserve’s monetary policy.

At 19:23 GMT, December Comex gold is trading $1795.00, up $2.90 or +0.16%.

U.S. 10-year and 30-year Treasury yields are under pressure late Monday on safe-haven buying tied to another sell-off in the U.S. equity markets. The U.S. Dollar is being supported by increased bets on sooner-than-expected tapering by the U.S. Federal Reserve after August’s Producer Price Index jumped more than expected on Friday.

Stronger-than-expected consumer inflation numbers on Tuesday will likely solidify an early tapering. Although the Fed has called the rise in inflation “transitory”, it looks as if it is getting close to getting out of control in my opinion. This could hurt labor market growth, which the Fed says is its number one goal.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $1781.30 will change the main trend to down. A move through $1774.60 will reaffirm the downtrend. A trade through $1836.90 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through the minor bottom at $1783.10 will indicate the selling pressure is getting stronger. A move through $1806.00 will change the minor trend to up.

Resistance is a pair of 50% levels at $1795.00 and $1800.00. This is followed by a Fibonacci level at $1828.80.

On the downside, the nearest support is a 50% level at $1757.40, followed by a Fibonacci level at $1738.60.

Daily Swing Chart Technical Forecast

The near-term direction of the December Comex gold futures contract will be determined by trader reaction to the pair of 50% levels at $1795.00 and $1800.00.

Bearish Scenario

A sustained move under $1795.00 will indicate the presence of sellers. The first downside target is $1783.10, followed by the pair of 50% levels at $1781.30 and $1774.60.

Taking out $1774.60 could trigger a further decline into $1757.40 to $1738.60.

Bullish Scenario

A sustained move over $1800.00 will signal the presence of buyers. Taking out the minor top at $1806.00 could trigger an acceleration to the upside with $1828.80 the next likely target.