Gold Price Futures (GC) Technical Analysis – Reaction to US Consumer Confidence Report Sets the Tone

Gold futures are inching higher early Tuesday with traders reacting to a dip in Treasury yields and a slightly lower U.S. Dollar. Eight days ahead of next week’s U.S. Federal Reserve interest rate decision, we’re looking for the market to become more data dependent, starting with today’s series of reports, including consumer confidence.

At 03:53 GMT, December Comex gold futures are trading $1655.80, up $1.70 or +0.10%. On Monday, the SPDR Gold Shares ETF (GLD) settled at $153.67, down $0.48 or -0.31%.

Data Sensitivity Highlighted on Monday

Gold prices nudged lower on Monday, weighed down by a firm dollar and elevated U.S. bond yields, while expectations of another hefty rate hike by the Federal Reserve kept investors on the sidelines.

But that’s only half the story. At one point during the session, prices jumped to a 6-session high after a survey showed U.S. business activity contracted for a fourth straight month in October, the latest evidence of an economy softening in the face of high inflation and rising interest rates.

Traders Eyeing Economic Reports

Gold traders face another round of economic news on Tuesday, starting at 13:00 GMT.

The U.S. housing market will be at the forefront early Tuesday with the Home Price Index (HPI) and the S&P/CS Composite-20 HPI expected to come in lower than the previous month. The housing numbers are weakening because of rapidly rising mortgage rates.

The housing data will be followed by the CB Consumer Confidence and Richmond Manufacturing Index reports at 14:00 GMT. The Consumer Confidence report will be closely watched especially with the Fed scheduled to meet on November 1-2. It is expected to show a decline from 108.0 to 105.9 due to high inflation and rising interest rates.

Weaker-than-expected data could help underpin gold prices since it will likely fuel speculation the Fed may slow down the pace of rate hikes.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $1621.10 will reaffirm the downtrend. A trade through $1738.70 will change the main trend to up.

The minor range is $1621.10 to $1675.50. Its pivot at $1648.30 is potential support.

The short-term range is $1738.70 to $1621.10. Its retracement zone at $1679.90 to $1693.80 is the nearest resistance.

The longer-term resistance area is $1723.40 to $1747.30.

Daily Swing Chart Technical Forecast

Trader reaction to the pivot at $1648.30 is likely to determine the direction of the December Comex gold futures contract on Tuesday.

Bullish Scenario

A sustained move over $1648.30 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the resistance cluster at $1679.90 to $1693.80. The latter is a potential trigger point for an acceleration into the next potential resistance level at $1709.10.

Bearish Scenario

A sustained move under $1648.30 will signal the presence of sellers. If the selling pressure generates enough downside momentum then look for the selling to extend into the support cluster at $1621.10 to $1618.00.