Gold Price Futures (GC) Technical Analysis – Surge in Yields Weighing on Demand for Non-Yielding Gold

Gold futures are edging lower shortly after the mid-session on Monday as a surge in Treasury yields weighed on demand for non-yielding bullion.  Traders were also monitoring the European Central Bank’s forum in Portugal for any cues on policy moves. Traders are particularly interested in the size of the expected rate hike in September.

At 17:43 GMT, August Comex gold is trading $1823.70, down $6.60 or -0.36%. The SPDR Gold Shares ETF (GLD) is at $169.90, down $0.19 or -0.11%.

U.S. Treasury yields were higher to start the week as market players assessed the prospect of central banks implementing more interest rate hikes to curb soaring inflation.

Additionally, investors are watching for any signs of future policy moves as central bank heads, including ECB President Christine Lagarde and Fed Chair Jerome Powell, attend the annual forum in Sintra.

In other news, traders downplayed the news that Britain, the United States, Japan and Canada were planning to ban imports of Russian gold.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1806.10 will signal a resumption of the downtrend. A move through $1861.50 will change the main trend to up.

The minor trend is also down. A trade through $1850.30 will change the minor trend to up. This will shift momentum to the upside. A move through the minor bottom at $1817.77 will signal a resumption of the downtrend.

The market is currently trading on the weak side of several retracement zone levels, making them resistance. The nearest is a Fibonacci level at $1826.60. This is followed by the 50% level at $1837.30. The major resistance is the long-term Fibonacci level at $1844.00.

Daily Swing Chart Technical Forecast

Trader reaction to $1826.60 is likely to determine the direction of the August Comex gold futures contract into the close on Monday.

Bearish Scenario

A sustained move under the short-term Fibonacci level at $1826.60 is likely to determine the direction of the August Comex gold futures contract into the close on Monday. If this creates enough downside momentum then look for a break into the minor bottom at $1817.77. This is a potential trigger point for an acceleration into the main bottom at $1806.10.

Bullish Scenario

A sustained move over $1826.60 will indicate the presence of buyers. If this creates enough upside momentum then look for a labored rally with potential targets $1837.30 and $1844.00.