Gold Price Futures (GC) Technical Analysis – Weakens Under $1777.50, Strengthens Over $1800.00

Gold futures are drifting lower early Thursday, pressured by a rising U.S. Dollar, which strengthened after U.S. Federal Reserve meeting minutes showed that policymakers were largely on board to start easing its massive stimulus buying before the end of 2021.

Treasury yields rose on the news, driving the U.S. Dollar higher and making the dollar-denominated asset expensive for holders of other currencies.

At 06:52 GMT, December Comex gold futures are trading $1782.00, down $2.40 or -0.13%.

The account of the July 27-28 meeting showed Fed officials largely expect that later this year they will reduce the central bank’s emergency monthly purchases of $120 billion of Treasury bonds and mortgage-backed securities, Reuters wrote.

Although gold is edging lower, the price action suggests traders may be waiting to see what Fed officials have to say at the Jackson Hole central bankers’ summit on August 26-28 before picking a direction. Some could be waiting for the jobs report and consumer inflation data in September also. No one, including the Fed, seems to know what risks the economy is facing from the spread of the Delta variant.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1797.60 will change the main trend to up. A move through $1677.90 will signal a resumption of the downtrend.

The short-term range is $1839.00 to $1677.90. The market is currently trading on the strong side of its retracement zone at $1777.50 to $1758.50, making the area support.

The minor range is $1677.90 to $1797.60. Its retracement zone at $1737.80 to $1723.60 is the primary downside target. This is followed closely by a long-term Fibonacci level at $1716.00.

The main range is $1922.00 to $1677.90. Its retracement zone at $1800.00 to $1828.80 is potential resistance. Ahead of this area is the long-term 50% level at $1795.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold market on Thursday is likely to be determined by trader reaction to $1777.50.

Bullish Scenario

A sustained move over $1777.50 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the resistance cluster at $1795.00, $1797.60 and $1800.00.

The 50% level at $1800.00 is not only resistance, but also the trigger point for an acceleration to the upside with $1828.80 the next target, followed by main tops at $1837.50 and $1839.00.

Bearish Scenario

A sustained move under $1777.50 will signal the presence of sellers. This could trigger a quick break into $1758.50. If this fails then look for the selling to possibly extend into $1737.80 to $1723.60.

Look for counter-trend buyers to step in on a test of $1737.80 to $1723.60. They will be trying to form a potentially bullish secondary higher bottom.