Gold Price Futures (GC) Technical Analysis – Main Trend Up with $1798.50 – $1822.60 Next Target

Gold futures jumped on Thursday amid expectations the U.S. Dollar will likely weaken in coming days after Fed Chair Jerome Powell hinted at a slowdown in the pace of rate hikes at future meetings and U.S. economic data showed slower growth.

On Thursday, December Comex gold futures settled at $1769.20, up $31.70 or +0.71%. The SPDR Gold Shares ETF (GLD) finished at $163.64, up $1.97 or +1.22%.

After announcing another 75-basis point rate hike at the end of a two-day policy meeting on Wednesday, Powell said the next more will depend on incoming data.

In other news, data from the Commerce Department showed that the U.S. economy contracted unexpectedly in the second quarter. GDP decreased 0.9 percent in the second quarter, following a 1.6 percent decline in the first quarter. Economists had expected GDP to increase by 0.5 percent.

The data fueled concerns that the Fed’s resolve to tame surging prices through aggressive monetary policy tightening is hurting economic growth.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Wednesday when buyers took out the previous main top at $1755.90. The uptrend was reaffirmed on Thursday when buyers took out the minor top at $1763.10.

The short-term range is $1900.80 to $1696.10. Its retracement zone at $1798.50 to $1822.60 is the primary upside target.

The minor support is $1735.30. The major support is a long-term 50% level at $1709.10.

Short-Term Outlook

Trader reaction to $1750.70 is likely to determine the direction of the December Comex gold market early Friday.

Bullish Scenario

A sustained move over $1750.70 will indicate the presence of buyers. A trade through Thursday’s high at $1774.40 will indicate the buying is getting stronger. If this move generates enough upside momentum then look for a surge into the short-term retracement zone at $1798.50 to $1822.60.

Bearish Scenario

A sustained move under $1750.70 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the minor pivot at $1735.30.

A failure to hold $1735.30 will likely lead to a test of the minor bottom at $1727.00. Taking out this level will change the main trend to down with $1709.10 the next target. This is the last potential support before the $1696.10 – $1694.50 support cluster.