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James Hyerczyk

Gold futures jumped late in the session on Friday even after U.S. equity investors breathed a sigh of relief after President Donald Trump signaled no changes to the trade deal with China despite rising tensions.

During a much-awaited news conference, Trump said he would take action to eliminate special treatment towards Hong Kong. However, he did not indicate the U.S. would pull out of the phase one trade agreement reached with China earlier this year, easing trader concerns for the time being.

On Friday, August Comex gold settled at $1751.70, up $23.40 or +1.35%. For the week, the market finished down $1.80 or -0.10%. Gold closed up $50.70 or 2.98% for the month.

The trade was tentative throughout the session as caution set in ahead of Trump’s press conference and his response to a Chinese national security law for Hong Kong and its potential impact on an already fragile global economy.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top from May 18.

The main trend will change to down on a trade through $1701.60. A move through $1787.50 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is down. This confirms the shift in momentum. A trade through $1770.10 will change the minor trend to up.

The short-term range is $1789.00 to $1668.40. Its 50% level at $1728.70 is providing support.

The minor range is $1787.50 to $1701.60. Its retracement zone at $1744.10 to $1754.30 is potential resistance. Gold closed inside this zone on Friday.

The main range is $1454.80 to $1789.00. If the main trend changes to down then its retracement zone at $1621.90 to $1582.40 will become the primary downside target. Buyers are likely to come in on a test of this zone since it represents value.


Short-Term Outlook

We’re going to be watching trader reaction to $1744.10 to $1754.30 early next week. This should tell us if buyers have returned or if sellers are taking control.

A sustained move under $1744.10 will indicate the presence of sellers. If the gold market forms a secondary lower top then look for a near-term break under $1701.60 and a change in trend to down.

Overtaking $1754.30 and sustaining the rally will signal the presence of buyer. This will create another higher main bottom at $1701.60 and could create the upside momentum needed to challenge the pair of tops at $1787.50 and $1789.00.

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

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