Gold Price Futures (GC) Technical Analysis – Waiting for Catalyst to Trigger Breakout Over $1854.80

Gold futures are trading slightly better late in the session on Friday as U.S. Treasury yields weakened on safe-haven buying. Perhaps capping gains are a firm U.S. Dollar. Nonetheless, bullion is in a position to post its first week of gains in five on persistent worries over economic growth and a weekly decline in the greenback.

At 18:00 GMT, August Comex gold futures are trading $1848.90, up $1.10 or +0.06%. The SPDR Gold Shares ETF (GLD) is at $172.01, up $0.10 or +0.06%.

Mixed Daily Outlook as Traders Search for Catalysts

Treasury yields dipped slightly on Friday, continuing a trend of falling rates this week in the face of rising recession fears. The yield on the benchmark 10-year Treasury note fell 2 basis points to 2.83%. The yield on the 30-year Treasury bond moved 4 basis points lower to 3.03%.

Stock markets have had a turbulent week, with the benchmark S&P 500 briefly falling into bear market territory earlier today. Meanwhile the blue chip Dow Jones Industrial Average is headed for its eighth-straight negative week as investors fear a recession is imminent. That’s pushing investors to seek safe-haven protection in Treasurys, driving bond prices higher and yields lower.

Lower yields helped pressure the U.S. Dollar, making gold a more attractive asset to foreign buyers. The dollar was also pressured by expectations of rate hikes by the European Central Bank (ECB), the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ).

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $1917.60 will change the main trend to up. A move through $1792.00 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through $1811.70 will change the minor trend to down.

The market is currently trading on the strong side of three retracement levels at $1844.00, $1833.10 and $1823.30, making them support.

The nearest resistance is $1854.80. Then there is a big jump into $1890.00 and $1900.30.

Short-Term Outlook

Trader reaction to $1854.80 and $1844.00 will determine the direction of August Comex gold into the close and early next week.

Bullish Scenario

A sustained move over $1854.80 will indicate the presence of buyers. If this creates enough upside momentum then look for a near-term surge into $1890.00 – $1900.30.

Bearish Scenario

A sustained move under $1854.80 will signal the presence of sellers with the nearest support targets at $1833.10 and $1823.30.