Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1770.40 Sets the Early Tone on Thursday

Gold futures finished higher on Wednesday despite a stronger U.S. Dollar. Lower Treasury yields may have provided some support. The choppy price action may have been fueled by position-squaring ahead of Friday’s U.S. Non-Farm Payrolls report. A strong jobs report could confirm the Fed’s hawkish tone in its last policy statement, which would weigh on gold prices.

At 20:52 GMT, August Comex gold is trading $1770.10, up $6.50 or +0.37%.

Despite the higher close, gold was still headed for its largest monthly decline since November 2016, as investors were wary ahead of the upcoming U.S. labor market report that could intensify fears over the U.S. Federal Reserve easing its asset purchases.

Investors now await the U.S. Labor Department’s Non-Farm Payrolls due on Friday, which is expected to show a gain of 690,000 jobs in June, according to a Reuters poll.

The data follows suggestions from Federal Reserve officials that the U.S. central bank should begin tapering its asset purchase program this year.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1750.10 will signal a resumption of the downtrend. A move through $1906.90 will change the main trend to up. This is highly unlikely, but due to the prolonged move down in terms of price and time, the market is currently inside the window of time for a closing price reversal bottom.

The main range is $1678.40 to $1919.20. The market is currently trading on the weak side of its retracement zone at $1770.40 to $1798.80, putting it in a bearish position.

The short-term range is $1919.20 to $1750.10. Its 50% to 61.8% zone at $1834.70 to $1854.60 is the next potential upside target.

Daily Swing Chart Technical Forecast

The direction of the August Comex gold futures contract early Thursday is likely to be determined by trader reaction to $1770.40.

Bearish Scenario

A sustained move under $1770.40 will indicate the presence of sellers. The first downside target is $1750.10. Taking out this level could drive the market into the April 13 main bottom at $1725.50. This is the last potential support before a pair of main bottoms at $1679.40 to $1678.40.

Bullish Scenario

A sustained move over $1770.40 will signal the presence of buyers. This is a potential trigger point for an acceleration into the main 50% level at $1798.80. Overcoming this level could lead to another upside breakout with $1834.70 the next key target.