Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1334.60 Sets Tone into Close

Gold is trading higher shortly before the regular session close, but backing off from its high. The early surge was fueled by a drop in Treasury yields and weaker demand for higher risk assets. A weak consumer inflation report also helped drive the market to its high for the session because it increased the odds of a sooner-than expected Fed interest rate cut.

At 16:47 GMT, August Comex gold futures are trading $1337.40, up $6.20 or +0.47%. The high of the session is $1342.30.

A turnaround in the U.S. Dollar Index spurred by a drop in the Euro is helping to drive gold from its highs late in the session.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1352.70 will signal a resumption of the uptrend. This will also make $1323.60 a new main bottom.

The minor trend is up. A trade through $1323.60 will change the minor trend to down.

The market is currently trading on the strong side of a major Fibonacci level at $1332.60. This is helping to give the market an upside bias. Falling back below this level will neutralize the longer-term bias.

The short-term range is $1352.70 to $1323.60. This zone was the first upside target. It stopped the rally earlier today.

On the downside, if $1323.60 is taken out, we could see a further break into $1313.70 to $1304.40.

Daily Technical Forecast

Based on the current price at $1337.40, the direction of gold late in the session is likely to be determined by trader reaction to the steep uptrending Gann angle at $1334.60.

Bullish Scenario

A sustained move over $1334.60 will indicate buyers are trying to prop up the market. This could lead to a test of $1338.20 then a resistance cluster at $1341.60 to $1342.00. The latter is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $1334.60 will signal the presence of sellers. This could trigger a break into the Fibonacci level at $1332.60. This is the trigger point for an acceleration to the downside with the next targets $1323.60 and $1322.50. The latter is another trigger point for an acceleration to the downside.