Gold Price Futures (GC) Technical Analysis – $1253.80 Trigger Point for Potential Acceleration to Upside

Gold futures are trading lower early Thursday as investors continue to react to the U.S. Federal Reserve’s less-dovish than predicted monetary policy statement and expectations of future rate hikes in 2019. On Wednesday, the Fed raised its benchmark interest rate by 25-basis points as widely expected. However, what threw gold investors for a loop was the central bank’s decision to retain the core of its plan to tighten monetary policy next year.

At 0643 GMT, February Comex gold futures are trading $1250.00, down $6.40 or -0.52%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. Yesterday’s rally through $1256.60 reaffirmed the uptrend. Overtaking $1262.20 will reaffirm the uptrend. A trade through $1236.50 will change the main trend to down.

Wednesday’s price action helped make $1262.20 a new minor top.

The short-term range is $1236.50 to $1262.20. Its 50% level or pivot at $1249.40 is currently controlling the price action.

The intermediate range is $1216.80 to $1262.20. Its retracement zone at $1239.50 to $1234.10 is the first downside target.

The main range is $1202.40 to $1262.20. Its retracement zone at $1232.30 to $1225.20 is the major downside target.

The combination of the retracement zones creates a potential support cluster at $1234.10 to $1232.30.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the February Comex gold futures contract on Thursday is likely to be determined by trader reaction to the short-term pivot at $1249.40.

Bullish Scenario

A sustained move over $1249.40 will indicate the presence of buyers. If this move can generate enough upside momentum then look for a rally into $1253.80. Aggressive counter-trend sellers could come in on a test of this level. They are going to try to form a secondary lower top. Overcoming $1253.80, however, could trigger a retest of yesterday’s high at $1262.20.

Bearish Scenario

A sustained move under $1249.40 will signal the presence of sellers. The first target is yesterday’s low at $1245.30. If sellers can take out this low then look for the selling to possibly extend into the intermediate 50% level at $1239.50. Since the main trend is up, buyers could come in on the first test of this level.

If $1239.50 fails to stop the selling then look for the move to possibly extend into the main bottom at $1236.50, followed by the potential support cluster at $1234.10 to $1232.50.