Gold Price Futures (GC) Technical Analysis – Watch for Counter-Trend Buyers at $1798.80 to $1770.40

Gold futures are down nearly 1.5% late in the session on Wednesday after U.S. Federal Reserve policymakers brought forward projections for the first post-pandemic interest rate hikes into 2023.

In its new projections, 11 out of 18 Fed officials projected at least two quarter-point interest rate increases for 2023, even as officials in their statement pledged to keep policy supportive for now to encourage an ongoing labor market recovery.

At 20:34 GMT, August Comex gold futures are trading $1822.40, down $34.00 or -1.83%.

Gold was further pressured by a jump in U.S. Treasury yields and the U.S. Dollar after the Fed announcement. Higher yields raise the opportunity cost of holding non-yielding bullion.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1845.70 reaffirmed the downtrend. The next potential downside target is the May 13 main bottom at $1810.70. A trade through $1906.90 will change the main trend to up.

On the upside, potential resistance levels come in at $1822.40, $1838.00 and $1870.50. The major resistance is the long-term 50% level at $1899.20.

The main range is $1678.40 to $1919.20. Its retracement zone at $1798.80 to $1770.40 is the primary downside target area. Aggressive counter-trend buyers could come in on a test of this zone.

Daily Swing Chart Technical Forecast

The direction of the August Comex gold futures contract into the close is likely to be determined by trader reaction to the 50% level at $1822.40.

Bearish Scenario

A sustained move under $1822.40 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling pressure to possibly extend into the main 50% to 61.8% zone at $1798.80 to $1770.40. Aggressive counter-trend buyers could come in on a test of this area.

Bullish Scenario

A sustained move over $1822.40 will signal the presence of counter-trend buyers. If the short-covering rally continues then look for the rally to possibly extend into another 50% level at $1838.00.