Gold futures closed higher in Monday’s limited holiday trade after reaching a two-week high as concerns eased over an earlier-than-expected rate hike by the Federal Reserve after the release of a mixed bag of U.S. jobs data on Friday. Meanwhile, the focus shifted to minutes from the U.S. central bank’s June policy meeting, due to be released on Wednesday.

On Monday, August Comex gold futures settled at $1792.00, up $8.70 or +0.49%.

Data on Friday showed U.S. companies in June hired the most workers in 10 months, but unemployment ticked higher, workforce participation didn’t budge and the pace of hourly earnings growth slowed.

The price action suggests the market may be ripe for a short-covering rally equal to about 50% to 61.8% of the recent break.

Daily August Comex GoldDaily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1750.10 will signal a resumption of the downtrend. A trade through the last two main tops at $1906.90 and $1919.20 will change the main trend to up.

The main range is $1678.40 to $1919.20. The market is currently testing its retracement zone at $1798.80 to $1770.40. This zone is controlling the near-term direction of the gold market.

The short-term range is $1919.20 to $1750.10. Its retracement zone at $1834.70 to $1854.60 is the primary upside target. Since the main trend is down, a test of this area is likely to bring in new short-sellers.

Short-Term Outlook

The early direction of the August Gold market on Tuesday is likely to be determined by trader reaction to the 50% level at $1798.80.

Bearish Scenario

A sustained move under $1798.80 will indicate the presence of sellers. This could trigger a break into the 61.8% level at $1770.40. If this fails then look for the selling to possibly lead to a retest of $1750.10.

Bullish Scenario

A sustained move over $1798.80 will signal the presence of buyers. If this move is able to generate enough upside momentum then look for a possible acceleration into the short-term retracement zone at $1834.70 to $1854.60.

Story continues

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This article was originally posted on FX Empire

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