Gold Price Futures (GC) Technical Analysis –Weakens Under $1798.50, Strengthens Over $1822.60

Gold futures are modestly lower early Friday as traders awaited for Friday’s jobs report for further clues about the Federal Reserve’s path of rate hikes and the state of the economy.

Economists expect 258,000 jobs were added in July, down from 372,000 in June according to Dow Jones. Unemployment is expected to hold steady at 3.6% and Average Hourly Earnings are expected to have risen 0.3%.

At 08:17 GMT, December Comex gold futures are trading $1803.20, down $3.70 or -0.20%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $167.15, up $2.70 or +1.64%.

Traders are hoping the U.S. Non-Farm Payrolls report offers more clarity on the Federal Reserve’s aggressive tightening plans to fight inflation.

A strong report, especially the average hourly earnings figure, could give the Fed the greenlight to raise rates 50 to 75 basis points at its next policy meeting on September 21. This would likely give Treasury yields and the U.S. Dollar a lift, while driving down gold prices. A weaker-than-expected NFP report could spike gold prices higher since it would reduce the chances of additional aggressive rate hikes.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through Thursday’s high at $1812.00 will indicate the buying is getting stronger. A trade through $1727.00 will change the main trend to down. Additionally, due to the prolonged move up in terms of price and time, the market is vulnerable to a closing price reversal top.

The minor trend is also up. A trade through $1770.00 will change the main trend to down. This will also shift momentum to the downside.

The intermediate range is $1900.80 to $1696.10. The market is currently testing its retracement zone at $1798.50 to $1822.60. This area is controlling the near-term direction of the market.

The minor range is $1727.00 to $1812.00. Its 50% level at $1769.50 forms a support cluster with the minor bottom at $1770.00.

Another minor range is $1696.10 to $1812.00. Its 50% level at $1754.10 is additional support.

Daily Swing Chart Technical Forecast

Trader reaction to $1806.90 is likely to determine the direction of the December Comex gold futures contract on Friday.

Bullish Scenario

A sustained move over $1806.90 will indicate the presence of buyers. Taking out yesterday’s high at $1812.00 could lead to a test of the intermediate Fibonacci level at $1822.60.

The Fib level at $1822.60 is a potential trigger point for an acceleration to the upside with a pair of main tops at $1880.00 and $1900.80 the next targets.

Bearish Scenario

A sustained move under $1806.90 will signal the presence of sellers. The first target is the intermediate 50% level at $1798.50. This is a potential trigger point for an acceleration to the downside with a pair of 50% levels at $1769.50 and $1754.10 the next targets.