Gold Price Futures (GC) Technical Analysis – Weakens Under $1770.40, Strengthens Over $1798.80

Gold futures inched higher on Friday as investors awaited U.S. Non-Farm Payrolls data that might influence the timing of a shift in the Federal Reserve’s policy stance. To some extent, concerns over the spread of the coronavirus’ Delta variant are underpinning prices.

Traders are becoming worried that the highly contagious Delta variant will force countries in Asia and Europe to walk back reopening plans. This is supportive for gold because it would encourage some central banks to remain dovish for longer-than-expected.

At 09:49 GMT, August Comex gold is trading $1783.30, up $6.50 or +0.37%.

The focus now shifts to the U.S. Non-Farm Payrolls report due at 12:30 GMT, which is likely to show an increase of 690,000 jobs last month, as per a Reuters poll.

Some traders are whispering a 1 million jobs number. This number or more can expedite the Fed’s policy tapering and rate-hike plans. This would likely trigger a sharp break in gold futures.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1750.10 will signal a resumption of the downtrend. A move through $1906.90 will change the main trend to up. This is highly unlikely, but there is room for a normal 50% to 61.8% retracement of the last break.

The main range is $1678.40 to $1919.20. Gold futures are currently trading inside its retracement zone at $1798.80 to $1770.40.

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 trend is down, sellers could come in on the first test of this area.

Daily Swing Chart Technical Forecast

The direction of the August Comex gold futures contract on Friday is likely to be determined by trader reaction to $1770.40.

Bearish Scenario

A sustained move under $1770.40 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into $1750.10. Taking out this main bottom could drive the market into the April 13 main bottom at $1725.50.

Bullish Scenario

A sustained move over $1770.40 will signal the presence of buyers. The first upside target is $1798.80. Look for sellers on the first test of this level. Taking it out could trigger an acceleration to the upside with $1834.70 the near-term target.