Gold’s market remains inside its 11 July range for a 2nd session, which suggests investor indecision and impending volatility.
The lack of movement in the USD and Treasury yields is helping to contribute to the tight trading range.
Tuesday, August COMEX gold is trading at: 1,416.50, +3.00 (+0.21%), as of 1:37a EDT, the market is open.
Gold has been drifting since its multi-year high at 1442.90 on 25 June. That was the day that many investors believe Fed Chairman Powell dampened the chances of a 50-bpts rate cut in late July.
Then last week, Mr. Powell signaled a 25-bpts rate hike, something that gold traders priced in nearly a month ago, but the chances of a half-a-point cut is iffy now. This is likely to drive the price action over the near-term.
Traders will be looking at this week’s US economic data while listening to several Fed speakers to determine whether there is any chance of a 50-basis point rate cut.
Gold will likely rise if investors put this aggressive move back in play. Otherwise, seeing at sideways-to-lower action near-term.
Daily Tech Analysis: The main trend is North according to the daily swing chart. A trade through 1441.00 will signal a resumption of the uptrend, while a move through 1442.90 could trigger a breakout to the Northside.
The main trend will change to down on a move through 1387.50. Taking out the next main bottom at 1384.70 will likely fuel an acceleration to the Southside.
The near-term range is 1442.90 – 1384.70. Its 50% level or pivot at 1413.80 is controlling the direction of the market now.
The intermediate range is 1323.60 – 1442.90. Its retracement zone at 1383.30 – 1369.20 is support.
The main range is 1274.60 – 1442.90. Its retracement zone at 1358.80 – 1338.90 is potentially major support. It is controlling the longer-term direction of the market.
Near Term Technicals: Based on the price action, the direction of the August COMEX gold market Monday is likely to be determined by trader reaction to the pivot at 1413.80.
The Bulls: A clear move over $1413.80 will indicate the presence of buyers. Look for a rally with potential resistance angles coming in at 1415.60, 1416.90 and 1422.60, the latter is the trigger point for a rally into down-trending Gann angles at 1429.90 and 1436.40. These are the last potential resistance angles before the 1441.00 and 1442.90 main Tops.
The Bears: A sustained move under 1413.80 will signal the presence of sellers. The 1st target angle comes in at 1403.50, followed by another up-trending Gann angle at 1395.50. This is the last potential support angle before the 1387.50 and 1384.70 main bottoms.
Outlook: The market is looking for a catalyst and if it does not get 1 soon, it is likely to continue to straddle the pivot at 1413.80.