Yahoo Finance Gold Price Futures (GC) Technical Analysis – Could Spike Higher if Dollar Index Spikes Lower
Gold futures are trading slightly lower early Friday, while posting an inside move. The chart pattern suggests investor indecision and impending volatility. The direction of the U.S. Dollar will determine the next major move in gold. The Greenback fell on Thursday after hitting a new high against a basket of currencies following criticism of the Fed by President Trump.
At 0515 GMT, August Comex gold is trading $1221.70, down $2.30 or -0.19%.
By the way, don’t make anything of Trump’s comments about Fed policy. Although they were unprecedented by some measures, the central bank is about as independent as they come so I doubt the President’s comments will mean much.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1210.70 will signal a resumption of the downtrend. The trend will change to up on a move through $1266.90.
Gold is down nine sessions from its last main top at $1266.90. This puts the market in the window of time for a closing price reversal bottom. Given the current downside momentum, it seems the only pattern to stop this price slide will be a daily or weekly closing price reversal bottom.
The short-term range is $1266.90 to $1210.70. Its retracement zone at $1238.80 to $1245.40 is new resistance. Since the main trend is down, a rally into this zone is likely to draw the attention of short-sellers.
Daily Swing Chart Technical Forecast
Based on the early price action especially the inside move, the direction of the August Comex gold market today is likely to be determined by trader reaction to yesterday’s high at $1229.60 and yesterday’s low at $1210.70.
Trader reaction to these levels, per se, is not likely to drive the price action, but rather the direction of the U.S. Dollar. Gold traders will just react to the movement in the dollar.
A sustained move over $1229.60 will make $1210.70 a new minor bottom. This could trigger a short-covering rally into $1238.80 to $1245.40, where it’s likely to run into new resistance.
Taking out and sustaining the move under $1210.70 will indicate the selling is getting stronger. This is a possible trigger point for an acceleration to the downside since the next major targets are $1159.10 and $1158.40.
This article was originally posted on FX Empire
