Gold Price Futures (GC) Technical Analysis – Trade Thru $1875.00 Changes Main Trend to Up

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Gold futures are nearly flat late Friday in a lackluster trade as traders continued to monitor the direction of U.S. Treasurys and the U.S. Dollar while digesting the impact of a slew of new economic data. Nonetheless, bullion is still in a position to post its second consecutive weekly gain.

Despite the limited price action this week, we did learn that fears of aggressive policy tightening by the Federal Reserve may be subsiding.

At 18:00 GMT, August Comex gold is trading $1857.10, up $3.20 or +0.17%. The SPDR Gold Shares ETF (GLD) is at $172.86, up $0.10 or +0.06%.

Traders seem to be reacting favorably to a slew of U.S. economic reports released earlier today especially reports on inflation and consumer spending.

Reports from the Commerce Department showed consumer spending rose by a more-than-expected 0.9% in April and inflation rose at a slower rate. The positive results are raising hopes that the Federal Reserve might not hike rates as aggressively as previously thought.

March spending growth was also revised to 1.4% from 1.1%. The personal consumption expenditures price index, the Fed’s preferred inflation gauge, gained 0.2% last month after shooting up 0.9% in March.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1875.00 will change the main trend to up. A move through $1792.00 will signal a resumption of the downtrend.

The minor trend is up. This is generating the upside momentum. A trade through $1842.50 will change the minor trend to down.

The support is a minor 50% level at $1854.80, a long-term Fibonacci level at $1844.00 and another 50% level at $1833.50.

On the upside, resistance is a pair of 50% levels at $1890.00 and $1900.30.

Daily Swing Chart Technical Forecast

Trader reaction to $1854.80 will likely determine the direction of the August Comex gold futures contract into the close.

Bullish Scenario

Given the low volume, a sustained move over $1854.80 could to lead to a test of $1875.00.

Bearish Scenario

Crossing to the weak side of $1854.80 is likely to lead to a test of the price cluster formed by the long-term Fibonacci level at $1844.00, the minor bottom at $1842.50 and the minor 50% level at $1833.50.