Gold Price Futures (GC) Technical Analysis – Trend Changes to Down on Trade Through $1384.70
Gold futures are in a position to finish sharply lower on Friday following a steep intraday sell-off that has put the market in a position to change the main trend to down. The price action also indicates a double-top may be forming. If confirmed with renewed selling pressure next week, it could lead to a plunge into $1326.50 over the next three to five trading sessions.
Fueling the weakness in gold is a strong rise in U.S. Treasury yields. This made the U.S. Dollar a more attractive investment, leading to a drop in demand for dollar denominated gold. The catalyst behind the move was a larger-than-expected jump in non-farm payrolls in June. The headline number surged 224,000 last month, much higher than the 162,000 forecast. This news offset any concerns over weaker-than-expected growth in Average Hourly Earnings and a slight uptick in the Unemployment Rate.
At 20:25 GMT, August Comex gold is trading $1402.00, down $19.00 or -1.33%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The main trend will change to down on a trade through $1384.70. A trade through $1441.00 and $1442.90 will signal a resumption of the uptrend.
The minor range is $1442.90 to $1384.70. Its 50% level or pivot at $1413.80 is acting like resistance.
The short-term range is $1323.60 to $1442.90. Its retracement zone at $1383.30 to $1369.20 is the first downside target after the change in trend. Buyers could come in on the initial test of this area.
The main range is $1274.60 to $1442.90. If $1369.20 fails as support then look for the selling to possibly extend into its retracement zone at $1358.80 to $1338.90. Once again buyers could come in on a test of this area.
Daily Swing Chart Technical Forecast
On the upside into the close, the nearest resistance is the minor pivot at $1413.80.
On the downside, the nearest potential support target is the price cluster formed by the main bottom at $1384.70 and the short-term 50% level at $1383.30.
Based on the late session price action, it looks as if the market is going to finish the session between the 50% level at $1413.80 and the 50% level at $1383.30. If the main trend is getting ready to change to down then sellers are likely to continue to come in on rallies.
This article was originally posted on FX Empire
