Gold futures are inching higher shortly before the regular session opening on Tuesday as prices consolidate ahead of the start of the two-day Federal Reserve monetary policy meeting. The market is being supported by slightly weaker Treasury yields and U.S. Dollar.
At 10:18 GMT, August Comex gold is trading 1866.60, up $0.70 or +0.04%.
Benchmark U.S. 10-year Treasury yields slipped below 1.50% to hover near a three-month low, while the U.S. Dollar dipped for a second session after posting an impressive gain last week.
The price action suggests trader uncertainty ahead of Wednesday’s Fed decisions. The recent data showing a spike in U.S. consumer prices has benefited gold as it is seen as a hedge against inflation. But, rising inflation concerns could also force policymakers into an earlier tapering of currency-depreciating stimulus.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1845.70 will signal a resumption of the downtrend. A move through $1906.90 will change the main trend to up.
The minor trend is also down. A move through $1906.20 will change the minor trend to up. This will also shift momentum to the upside.
The short-term range is $1810.70 to $1919.20. The market is currently straddling its 50% level at $1865.00.
The minor range is $1919.20 to $1845.70. Its 50% level at $1882.50 is the nearest upside target. This is followed by the long-term 50% level at $1899.20.
On the downside, additional support levels are a series of 50% levels at $1838.00, $1822.40 and $1799.30.
Daily Swing Chart Technical Forecast
The direction of the August Comex gold futures contract on Tuesday is likely to be determined by trader reaction to the pivot at $1865.00.
A sustained move over $1865.00 will indicate the presence of buyers. This could trigger a surge into the minor pivot at $1882.50. Sellers could come in on the first test of this level. Overtaking it could trigger an acceleration into $1899.20.
A sustained move under $1865.00 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into $1845.70, followed by a 50% level at $1838.00.