Gold Price Futures (GC) Technical Analysis – Strengthens Over $1788.50, Weakens Under $1760.80

Gold futures are trading lower late Friday as investors squared positions ahead of the weekend and next week’s U.S. Federal Reserve monetary policy meeting. Traders said strong U.S. economic data may be weighing on prices.

The U.S. Dollar is trading lower against a basket of major currencies, but that move is being primarily fueled by a stronger Euro and not a weakening U.S. economy so the impact on gold is limited. Rising Treasury yields is probably exerting the biggest influence on gold prices.

At 19:27 GMT, June Comex gold futures are trading $1776.00, down $6.00 or -0.34%.

Data released earlier in the session showed U.S. factory powered ahead in early April, giving a lift to Wall Street, while a rebound in new home sales exceeded expectations in March.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1798.40 will signal a resumption of the uptrend. Taking out $1723.20 will change the main trend to down.

The minor trend is also up. A trade through $1763.50 will change the minor trend to down. This will also shift momentum to the downside.

The major resistance remains the long-term 50% level at $1788.50. The major support is the long-term Fibonacci level at $1711.90.

The minor range is $1763.50 to $1798.40. The market has been straddling its 50% level at $1781.00 the last two sessions.

Another minor range is $1723.20 to $1798.40. Its 50% level at $1760.80 is an additional support level.

The short-term range is $1677.30 to $1798.40. Its 50% level at $1737.90 is another support level.

Short-Term Outlook

The short-term direction will continue to be determined by trader reaction to the long-term 50% level at $1788.50. A sustained move under this level will continue to give the market a downside bias.

We’re not looking for a sharp break, however, but rather a labored move with the series of potential targets at $1767.60, $1760.80, $1747.20 and $1737.90 providing support.

We really can’t thinking about a steep break unless the market closes under the major Fibonacci level at $1711.90.

Look for a bullish tone on a sustained move over $1788.50 and a bearish tone on a sustained move under $1711.90.

Holding inside $1788.50 to $1711.90 will likely lead to a volatile sideways trade.