Gold Price Futures (GC) Technical Analysis – Traders Bracing for Hawkish Tone in Powell’s Jackson Hole Speech

Gold futures are inching lower while trading in a narrow range on Friday ahead of a widely expected speech from Federal Reserve Chairman Jerome Powell at 14:00 GMT. After posting a three-day rally, gains are being capped today by firm Treasury yields and a stronger U.S. Dollar.

Powell’s speech at the central bankers’ symposium in Jackson Hole, Wyoming will be monitored closely by market participants for any clues on how aggressively the U.S. central bank will continue tightening monetary policy, and for indications on a potential change of strategy in case of an economic slowdown.

At 05:30 GMT, December Comex gold futures are trading $1769.00 down $2.40 or -0.14%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $163.75, up $0.50 or +0.31%.

Core PCE Price Index Expected to Drop

Besides Powell’s speech, traders will also get the opportunity to react to several key U.S. economic reports.

At 13:30 GMT, the U.S. will release data on Core PCE prices, Goods Trade Balance, Personal Income, Personal Spending and Preliminary Wholesale Inventories.

At the same time Powell is expected to deliver his speech, reports on revised University of Michigan Consumer Sentiment and Revised University of Michigan Inflation Expectations will be released.

These reports aren’t likely to sway Powell but they will signal to the market lower inflation and a slowing economy.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $1824.60 will signal a resumption of the uptrend. A move through $1740.20 will change the main trend to down.

The minor trend is down. This is controlling the momentum.

The short-term range is $1696.10 to $1824.60. Its pivot at $1760.40 is potential support. The minor range is $1727.00 to $1824.60. Its pivot at $1776.20 is potential resistance.

On the downside, the major support is a 50% level at $1709.10. On the upside, the major resistance is the retracement zone at $1798.50 to $1822.60.

Daily Swing Chart Technical Forecast

Trader reaction to the pivots at $1760.40 and $1776.20 are likely to determine the direction of the December Comex gold futures contract on Friday.

Bearish Scenario

A sustained move under $1760.40 will signal the presence of sellers. If this creates enough downside momentum then look for a test of the main bottom at $1740.20. Taking out this level will change the main trend to down and could drive the market into the next main bottom at $1727.00.

A trade through $1727.00 will reaffirm the downtrend with the next target $1709.10, followed by a support cluster at $1696.10 to $1694.50.

Bullish Scenario

A sustained move over $1776.20 will indicate the presence of buyers. This could trigger a surge into $1798.50, followed by a resistance cluster at $1822.60 to $1824.60.