Gold Price Futures (GC) Technical Analysis – Strengthens Over $1800.00, Weakens Under $1774.60

December Comex gold futures are trading higher on Monday after reversing earlier intraday weakness. The market is being supported by a weaker U.S. Dollar. However, gains are being capped by rising U.S. Treasury yields and increasing demand for higher-risk assets.

At 04:25 GMT, December Comex gold futures are trading $1788.70, up $4.70 or +0.26%.

The safe-haven U.S. Dollar is taking a hit against a basket of currencies early in the session after touching a 9-1/2 high on Friday, as risk appetite improved, although the near-term outlook for the greenback remained upbeat.

Meanwhile, Treasury yields are edging higher amid continued uncertainty about the spread of the delta variant and discussion from the Fed of tapering bond purchases.

Volume is expected to be light this week ahead of the central bankers’ summit at Jackson Hole, Wyoming on August 26-28. With low volume sometimes comes increased volatility so be prepared for two-sided price action, and maybe a few false breakouts in either direction. We don’t expect the major players to take a position ahead of Jackson Hole.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1797.60 will change the main trend to up. A move through $1677.90 will reaffirm the downtrend.

The main range is $1922.00 to $1677.90. It retracement zone at $1800.00 to $1828.80 is the next key target zone and potential resistance area.

In front of the main retracement zone is a long-term 50% level at $1795.00.

The two 50% levels form a potential resistance cluster at $1795.00 to $1800.00.

The intermediate range is $1839.00 to $1677.90. Its retracement zone at $1775.00 to $1758.50 is potential support.

The short-term range is $1677.90 to $1797.60. Its retracement zone at $1737.80 to $1723.60 is the best downside target and value zone. Look for counter-trend buyers on a test of this area.

The major support is the long-term Fibonacci level at $1716.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures contract on Monday is likely to be determined by trader reaction to $1777.50.

Bullish Scenario

A sustained move over $1777.50 will indicate the presence of buyers. If this move can generate enough upside momentum then look for a quick rally into a resistance cluster at $1795.00, $1797.60 and $1800.00. The latter is a potential trigger point for an acceleration to the upside with $1828.80 the next likely target.

Bearish Scenario

A sustained move under $1777.50 will signal the presence of sellers. Taking out $1774.60 will indicate the selling is getting stronger. This could trigger a quick break into $1758.50. This is the last potential support before the value zone at $1737.80 to $1723.60.