Gold Price Futures (GC) Technical Analysis – Trading on Strong Side of $1798.80 – $1770.40 Retracement Zone

Gold futures are trading higher late in the session on Friday while headed for its third straight weekly gain. The market is posting an inside move that suggests investor indecision and impending volatility. Gains are being capped by a technical bounce in U.S. Treasury yields, but supported by a weaker U.S. Dollar.

At 20:13 GMT, August Comex gold futures are trading $1808.80, up $8.60 or +0.48%.

The catalyst behind this week’s rally is growing concerns that the Delta variant of COVID-19 could delay the global economic recovery although that wasn’t projected on Friday when yields bounced back.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the main tops at $1906.90 and $1919.20 will change the main trend to up. A move through $1750.10 will signal a resumption of the downtrend.

Although the market is up for a third straight week, the current seven day rally still looks like short-covering or accumulation rather than aggressive buying. If a support base is building then start getting ready for a strong rally.

The main range is $1678.40 to $1919.20. The gold market is currently trading on the strong side of its retracement zone at $1798.80 to $1770.40, making this area support.

The minor range is $1750.10 to $1819.50. Its 50% level or pivot at $1784.80 is potential support. It falls inside the main retracement zone.

The short-term range is $1919.20 to $1750.10. Its retracement zone at $1834.70 to $1854.60 is the primary upside target. Since the main trend is down, sellers could come in on a test of this area.

Short-Term Outlook

The price action late Friday suggests the direction of the August Comex gold market into the close will be determined by trader reaction to $1798.80.

Bullish Scenario

A sustained move over $1798.80 will indicate the presence of buyers. This could lead to a test of $1819.50. Overtaking this level could trigger a surge into the short-term retracement zone at $1834.70 to $1854.60.

Bearish Scenario

A sustained move under $1798.80 will signal the presence of sellers. This could trigger a break into the minor pivot at $1784.80, followed by $1770.40. This is the last potential support before the $1750.10 main bottom.