Gold futures are edging lower early Friday, but the precious metal remains in a position to post its fourth consecutive weekly gain after U.S. Federal Reserve Chairman Jerome Powell dampened investor fears of a faster tightening of monetary policy earlier in the week. Despite this week’s gains, advances have been limited by tentative buying and a firm U.S. Dollar.
At 07:37 GMT, August Comex gold futures are trading $1823.20, down $5.80 or -0.32%.
Traders seem to be biding their time for the next major move ahead of the July 27-28 Federal Reserve monetary policy meeting. However, I believe traders should watch the Treasury yields very closely. If the 10-year yield settles under the July 8 low at 1.30%, gold prices could spike higher at least over the near-term.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a move through the pair of main tops at $1906.90 and $1919.20. A trade through $1750.10 will signal a resumption of the downtrend.
The minor trend is up. This is controlling the momentum. A trade through $1791.00 will change the minor trend to down. This will also shift momentum to the downside.
The first minor range is $1791.00 to $1835.00. Its 50% level at $1813.00 is potential support.
The second minor range is $1750.10 to $1835.00. Its 50% level at $1792.60 is also potential support.
The main range is $1678.40 to $1919.20. Its retracement zone at $1798.80 to $1770.40 is the best support. It is controlling the near-term direction of the market.
The short-term range is $1919.20 to $1750.10. Its retracement zone at $1834.70 to $1854.60 is resistance. This area stopped the rally on Thursday at $1835.00.
The long-term resistance zone is $1899.20 to $1951.30.
Daily Swing Chart Technical Forecast
The direction of the August Comex gold futures contract on Friday is likely to be determined by trader reaction to $1834.70.
A sustained move under $1834.70 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the first minor pivot at $1813.00.
If $1813.00 fails to hold then look for the selling to possibly extend into the support cluster formed by a pair of 50% levels at $1798.80 and $1792.60, and a minor bottom at $1791.00.
A sustained move over $1834.70 will signal the presence of buyers. Overtaking this level could trigger an acceleration into $1854.60. This is a potential trigger point for an acceleration to the upside with the next major target coming in at $1899.20.