Gold Price Futures (GC) Technical Analysis – Strengthens Over $1899.20, Weakens Under $1885.00

Gold futures are inching higher in a lackluster trade on Friday, following a government report that showed U.S. consumer prices surged in April, boosting the precious metals appeal as an inflation hedge. Gold initially retreated on the news before turning higher for the session. Volume and volatility are on the low side as many traders have packed it in ahead of the extended U.S. holiday weekend.

At 17:28 GMT, August Comex gold futures are trading $1904.10, up $5.60 or +0.29%.

A key inflation indicator, the core personal consumption expenditures index (PCE), rose 3.1% in April, faster than expectations of a 2.9% increase but not as hot as many on Wall Street had feared. Meanwhile, the savings rate remained elevated at 14.9% last month, while consumer spending rose 0.5%, in line with estimates.

The U.S. Dollar initially rose on the news, capping golds gains, but the index eventually turned down and is now pressing its lows for the session. Treasury yields are falling, which could be supportive for gold prices into the close.

Daily August Comex GoldDaily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1915.60 will signal a resumption of the uptrend. The main trend will change to down on a move through $1810.70.

The minor trend is also up. A trade through $1854.40 will change the minor trend to down. This will shift momentum to the downside.

Taking out $1906.40 will change $1884.30 into a new minor bottom.

The main resistance is the long-term retracement zone at $1899.20 to $1951.30. Gold is currently trading inside this area.

The first minor range is $1854.40 to $1915.60. Its 50% level at $1885.00 provided support earlier in the session.

The second minor range is $1810.70 to $1915.60. Its 50% level at $1863.20 is an additional support level.

Daily Swing Chart Technical Forecast

The direction of the August Comex gold market into the close will likely be determined by trader reaction to $1899.20.

Bullish Scenario

A sustained move over $1899.20 will indicate the presence of buyers. A sustained move over this level could generate the upside momentum needed to challenge the main top at $1915.60. This is a potential trigger point for an acceleration to the upside with the main Fibonacci level at $1951.30 the next potential upside target.

Bearish Scenario

A sustained move under $1899.20 will signal the presence of sellers. This could trigger a break into $1885.00. If this level fails as support then look for the selling to possibly extend into $1863.20.