Gold Price Futures (GC) Technical Analysis – Short-Term Strength Over $1798.50, Weakness Under $1791.00

Gold futures are edging higher in a lackluster trade on Monday, helped by a slight dip in U.S. Treasury yields and a weaker U.S. Dollar. The market is also trading inside Friday’s range, which suggests investor indecision and impending volatility.

The market is being capped by worries over a super-sized rate hike by the Federal Reserve. Low volume is also contributing to the tight trade with most of the major players sitting on the sidelines ahead of Wednesday’s U.S. consumer inflation report.

At 12:49 GMT, December Comex gold is trading $1798.70, up $7.50 or +0.42%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $165.29, down $1.88 or -1.13%.

Traders are currently pricing in a 73.5% probability the Fed continues the pace of 75-basis point rate hikes for its next policy decision on September 21 to take soaring inflation after U.S. job growth unexpectedly accelerated in July.

Unless that probability moves significantly in either direction, gold is likely to drift inside a trading range. However, conditions could change on Wednesday with the release of the U.S. Consumer Price Index (CPI) report that could offer more clues on the Fed’s rate hike path.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1812.00 will signal a resumption of the uptrend. A move through $1727.00 will change the main trend to down.

The minor trend is also up. A move through $1770.0 will change the minor trend to down. This will shift momentum to the downside.

The intermediate range is $1900.80 to $1696.10. Its retracement zone at $1798.50 to $1822.60 is resistance. This zone stopped the rally at $1812.00 on August 4.

The first minor range is $1770 to $1812.00. Its pivot at $1791.00 is support.

The second minor range is $1727.00 to $1812.00. Its pivot $1769.50 is additional support.

The third minor range is $1696.10 to $1812.00. If the minor trend changes to down then look for a test of its pivot at $1754.10.

Daily Swing Chart Technical Forecast

Trader reaction to a pair of 50% levels at $1798.50 and $1791.00 sets the tone on Monday.

Bullish Scenario

A sustained move over $1798.50 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge through $1812.00 with $1822.60 the next key target.

Bearish Scenario

A sustained move under $1791.00 will signal the presence of sellers. If this creates enough downside momentum then look for a break into the support cluster at $1770.00 to $1769.50.