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

Gold futures are inching lower on Wednesday after hitting their lowest level since April 15 the previous session. Weighing on the market is a stronger U.S. Dollar, which rose in anticipation of a robust U.S. Non-Farm Payrolls report on Friday. Traders feel that healthy job gains in June will solidify the Federal Reserve’s recent hawkish stance.

At 09:48 GMT, August Comex gold futures settled at $1758.40, down $5.20 or -0.29%. According to Reuters, gold futures are on track for their biggest monthly decline since November 2016.

On the data front, payroll firm ADP is due to report on the number of private payrolls added in June, at 12:15 GMT. The data is expected to show the private sector of the economy added 555,000 jobs in June.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Tuesday when sellers took out the April 29 main bottom at $1756.80. A trade through $1750.10 will signal a resumption of the downtrend.

A trade through $1906.90 will change the main trend to up. This is highly unlikely, but the market is currently trading inside the window of time for a potentially bullish closing price reversal bottom.

The main range is $1678.40 to $1919.20. Gold is currently trading on the weak side of its retracement zone at $1770.40 to $1798.80, making this area new resistance.

The short-term range is $1919.20 to $1750.10. Its retracement zone at $1834.70 to $1854.60 is potential resistance.

Daily Swing Chart Technical Forecast

The direction of the August Comex gold futures contract on Wednesday is likely to be determined by trader reaction to $1764.70.

Bearish Scenario

A sustained move under $1764.70 will indicate the presence of sellers. The first downside target is yesterday’s low at $1750.10. Taking out this level could trigger an acceleration into the April 13 main bottom at $1725.50. This is another potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over $1764.70 will signal the presence of counter-trend buyers. This could trigger a surge into the Fibonacci level at $1770.40. Overcoming this level will indicate the short-covering rally is picking up strength with $1798.80 the next key target.

Don’t expect any major move to develop unless buyers can overcome $1798.80. Until then, traders are likely to be in the “sell the rally” mode.