Gold Price Futures (GC) Technical Analysis – Continuation of Downside Momentum Could Lead to Test of $1251.90

August Comex Gold futures finished lower last week with the selling pressure primarily being driven by a stronger U.S. Dollar and increased demand for higher risk assets. Firm U.S. Treasury yields also weighed on prices as well as the outlook for further increases in rates later in the year. Traditionally viewed as a safe-haven asset, gold showed little reaction last week to escalating trade tensions between the United States and China.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through $1251.90 will reaffirm the downtrend. The market is far from changing the main trend to up, but it is down eleven weeks from the last main top, putting it in the window of time for a potentially bullish closing price reversal bottom.

The minor trend is also down. A trade through $1313.00 will change the minor trend to up. This will also shift momentum to the upside.

The main range is $1251.90 to $1379.30. Its retracement zone at $1300.60 to $1315.60 is resistance.

The short-term range is $1375.10 to $1262.40. Its retracement zone is $1318.80 to $1332.00. This zone is also resistance.

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Weekly Technical Forecast

Based on last week’s price action and the close at $1270.70, the direction of the August Comex Gold market is likely to be determined by trader reaction to the uptrending Gann angle at $1265.90.

A sustained move over $1265.90 will indicate the presence of buyers. This could lead to a rally into the next uptrending Gann angle at $1279.90. Holding above this Gann angle could fuel an even stronger rally into a steep downtrending Gann angle at $1287.10. This angle has been guiding the gold market lower since the week-ending April 13 or 10 weeks.

Even if buyers are able to breakout over the angle at $1287.10, gold buyers will still be facing a lot of resistance from $1300.60 to $1332.00.

A sustained move under $1265.90 will signal the presence of sellers. Taking out last week’s low at $1262.40 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with $1251.90 the next major target.

Taking out $1251.90 could trigger an even further decline into the next major bottom at $1230.70.

Gold’s weakness is really no surprise with the U.S. Dollar near an 11-month high.