Gold Price Futures (GC) Technical Analysis – Trade Through $1760.40 Pivot Puts $1727.00 on Radar

Gold futures are down for a fifth straight session on Friday, testing its lowest level since July 28. The catalysts driving down bullion are rising U.S. Treasurys and a stronger U.S. Dollar. The prospects of more rate hikes by the U.S. Federal Reserve has put the market in a position to post its first weekly drop in five.

At 07:31 GMT, December Comex gold futures are trading $1767.20, down $4.00 or -0.23%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $163.97, down $0.38 or -0.23%.

Treasury yields are jumping, the U.S. Dollar is surging and gold prices are falling after Federal Reserve officials on Thursday spoke of the need for further interest rate hikes.

St. Louis Fed President James Bullard said he is leaning toward supporting a third straight 75-basis point interest rate hike in September. San Francisco Fed President Mary Daily reiterated here stance that hiking rates by 50 or 75 basis points at the September 21 policy meeting would be “reasonable”.

Overnight, the probability of a 75-basis-point rate hike, according to the CME FedWatch Tool, climbed to 45.5% after hitting 34.5% following the release of the Fed minutes on Friday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $1727.00 will change the main trend to down. A move through $1824.60 will signal a resumption of the uptrend.

The short-term range is $1696.10 to $1824.60. Its 50% level at $1760.40 is the nearest potential support. The main support is a long-term 50% level at $1709.10.

On the upside, potential resistance is a pivot at $1776.20, followed by the short-term retracement zone at $1798.50 to $1822.60. This area essentially stopped last week’s rally at $1824.60.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term 50% level at $1760.40 is likely to determine the direction of the December Comex futures contract on Friday.

Bearish Scenario

A sustained move under $1760.40 will indicate the presence of sellers. This could trigger an acceleration to the downside with the main bottom at $1727.00 the next target. This is followed by the main 50% level at $1709.10, the next main bottom at $1696.10 and the March 30, 2021 main bottom at $1694.50.

Bullish Scenario

A sustained move over $1760.40 will signal the presence of buyers. This could lead to a quick test of a minor pivot at $1776.20. Overtaking this level will indicate that the short-covering is getting stronger with the 50% level at $1798.50 the next target.

Side Notes

The key level to watch today is $1760.40. This is a potential trigger point for an acceleration to the downside.