Gold Price Futures (GC) Technical Analysis – Treading Water Ahead of Friday’s Non-Farm Payrolls Report

Gold futures are under pressure late in the session on Thursday in a choppy, low volume trade as U.S. Treasury yields rose following a drop in U.S. weekly initial jobless claims. The news helped stoke bets that the U.S. Federal Reserve may soon start winding down its economic support. Position-squaring ahead of Friday’s U.S. Non-Farm Payrolls report also kept a lid on prices.

At 19:44 GMT, December Comex gold futures are trading $1755.20, down $6.60 or -0.37%.

A rise in demand for riskier assets also pressured gold prices, while a slightly weaker U.S. Dollar may have helped underpin the precious metal. U.S. stocks rose on Thursday after Senators pushed the U.S. debt limit into December, this weighed on sentiment for gold.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1771.50 will change the main trend to up. A move through $1721.10 will signal a resumption of the downtrend.

The choppy price action this week has been controlled by a number of retracement levels.

With the market currently trading $1755.20, the nearest support is a 50% level at $1746.30 and a Fibonacci level at $1738.60. This is a potential trigger point for an acceleration into $1716.00.

On the upside, resistance comes in at $1757.40, $1765.90 and $1779.00.

Daily Swing Chart Technical Analysis

The direction of the December Comex gold futures contract early Friday is likely to be determined by trader reaction to $1757.40.

Bearish Scenario

A sustained move under $1757.40 will indicate the presence of sellers. The first downside target is $1746.30, $1745.40 and $1738.60.

Bullish Scenario

A sustained move over $1757.40 will signal the presence of buyers. The first upside target is $1765.90, followed by $1771.50 and $1779.00.

Side Notes

Ahead of Friday’s U.S. Non-Farm Payrolls report, the minor range is $1721.10 to $1771.50. Its 50% level at $1746.30 is the pivot. Since the market is trading over this level, it looks as if gold traders are leaning toward a weak payrolls report. If they are right, the market could blast through $1771.50 after the report on Friday. If they are wrong then look for a plunge under $1738.60 into $1721.10 to $1716.00.