Gold Price Futures (GC) Technical Analysis – Strengthens Over $1949.40, Weakens Under $1931.70

Gold futures are down over 2% at the mid-session in volatile trading on Thursday as the U.S. Dollar and Treasury yields rose after Federal Reserve Chair Jerome Powell shifted the central bank’s inflation target in a widely expected move.

The U.S. central bank rolled out an aggressive new strategy to lift employment and will seek to achieve inflation averaging 2% over time, offsetting below-2% periods with higher inflation “for some time.”

At 18:39 GMT, December Comex gold is trading $1936.60, down $15.90 or -0.81%.

Some said gold lost ground because the Fed news was already priced into the market. In my opinion, although the policy change is a form of stimulus, it seems to be part of a long-term plan. Investors are looking for something that would boost the economy over the short-run like free money from Congress.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2024.60 will signal a resumption of the uptrend. The main trend will change to down on a move through $1874.20.

The minor trend is also up. The minor trend will change to down on a trade through $1908.40. This will also shift momentum to the downside.

The short-term range is $2089.20 to $1874.20. Its retracement zone at $1981.70 to $2007.10 is resistance. This zone stopped the rally earlier today.

The minor range is $1874.20 to $2024.60. Its retracement zone at $1949.40 to $1931.70 is acting like a pivot.

The main range is $1690.10 to $2089.20. Its retracement zone at $1889.70 to $1842.60 is major support. It stopped the selling at $1874.20 on August 12.

Into the Close …

The direction of the December Comex gold futures contract into the close is likely to be determined by trader reaction to $1949.40 to $1931.70.

A sustained move over $1949.40 will indicate the presence of buyers. If this move generates enough upside momentum then look for the buying to possibly extend into $1981.70 to
$1987.00.

A sustained move under $1949.40 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into $1908.40 to $1889.70.