Gold Price Futures (GC) Technical Analysis – Hovering Above Long-Term Main Bottoms at $1703.00 and $1694.50

Gold futures inched lower on Tuesday as investors awaited more cues from top central banks on their monetary policy plans. Losses may have been limited, however, as a weakening dollar made it cheaper for overseas buyers.

On Tuesday, December Comex Gold futures settled at $1720.70, down $7.50 or -0.44%. Additionally, the SPDR Gold Shares ETF (GLD) finished at $159.16, down $0.35 or -0.22%.

Gold has not been able to capitalize on its safe-haven status recently, despite recession fears. It has declined more than $350 from a level above $2000 an ounce that it scaled in early March due to the Fed’s aggressive rate hike plans and the dollar’s recent rally, Reuters said.

Despite the tight trading range, gold prices are likely to see more volatility this week ahead of the U.S. manufacturing and services PMI reports due late this week, which could influence the size of the Fed’s next rate hike. The U.S. Federal Reserve meets on July 26-27.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the August 9, 2021 main bottom at $1703.00 will reaffirm the downtrend. A move through $1880.00 will change the main trend to up.

The minor trend is also down. A trade through $1763.10 will change the minor trend to up. This will shift momentum to the upside.

The major support is a long-term retracement zone at $1709.10 to $1618.00.

The minor range is $1763.10 to $1714.50. Its 50% level or pivot at $1738.80 is resistance.

The short-term range is $1900.80 to $1714.50. If the minor trend changes to up then look for a drive into the next retracement zone and possible resistance area at $1798.50 to $1822.60.

Short-Term Outlook

The direction of the December Comex gold futures contract early Wednesday is likely to be determined by trader reaction to $1727.40.

Bullish Scenario

A sustained move over $1727.40 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the minor pivot at $1738.80. This is a potential trigger point for an acceleration into the minor top at $1763.10.

Bearish Scenario

A sustained move under $1727.40 will signal the presence of sellers. The first downside target is last week’s low $1714.50.

This is followed by a support cluster created by a long-term 50% level at $1709.10, a long-term main bottom at $1703.00 and the March 30, 2021 main bottom at $1694.50. The latter is a potential trigger point for an acceleration to the downside.