Gold futures are trading higher late Wednesday, but well off their high. The market surged early in the session to just below last week’s multi-year high before the buying dried up. The catalysts behind the early strength were concerns over global growth, which increased the odds of central bank monetary policy easing. Gains were likely capped by position-squaring ahead of the Fourth of July holiday in the U.S. and increasing demand for higher risk assets.

At 17:21 GMT, August Comex gold is trading $1421.30, up $13.30 or +0.93%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1442.90 will signal a resumption of the uptrend. The main trend will change to down on a trade through $1384.70.

The short-term range is $1442.90 to $1384.70. Its 50% level or pivot at $1413.80 is controlling the short-term direction of the market.

The intermediate range is $1323.60 to $1442.90. If the main trend changes to down then look for a test of its retracement zone at $1383.30 to $1369.20.

The main retracement zone support is $1358.80 to $1338.90.

Daily Swing Chart Technical Forecast

Based on the early price action on Wednesday, the direction of the futures market into the close is likely to be determined by trader reaction to the 50% level at $1413.80.

Bullish Scenario

A sustained move over $1413.80 will indicate the presence of buyers. If this move generates enough upside momentum then look for a retest of $1442.90. This is the trigger point for a potential breakout to the upside.

Bearish Scenario

A sustained move under $1413.80 will signal the presence of sellers. If this move creates enough downside momentum then look for a potential acceleration to the downside with $1384.70 to $1383.30 the next likely downside targets.