Gold Price Futures (GC) Technical Analysis – $1790.80 Potential Trigger Point for Acceleration into $1822.10

Gold futures are inching higher early Friday with the price action being driven by a dip in Treasury yields and a weaker U.S. Dollar. Lower yields reduce gold’s opportunity cost while a weaker dollar decreases bullion’s cost for holders of other currencies.

At 07:04 GMT, February Comex gold is trading $1789.70, up $5.00 or +0.28%. On Tuesday, the SPDR Gold Shares ETF (GLD) settled at $166.81, up $0.59 or +0.35%.

Some fundamental traders are saying gold is being underpinned by political uncertainty after U.S. President Joe Biden threatened to impose “strong economic and other measures” on Russia if it invades Ukraine.

Others are saying the latest news surrounding the new omicron COVID variant is providing the support. Pfizer CEO Albert Bourla on Tuesday said the omicron variant appears to be milder than previous strains, but also seems to spread faster and could lead to more mutations in the future.

Meanwhile, South African scientists said that omicron significantly reduces the antibody protection generated by Pfizer and BioNTech’s vaccine, according to a small preliminary study.

Prices are likely to remain in a tight trading range until there is definitive data from science regarding the virus. Once that is attained, traders can assess the potential impact of the variant on the economy.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on November 16.

A trade through $1762.20 will change the main trend to down. A move through $1761.00 will reaffirm the downtrend.

The minor trend is up. It changed to up earlier in the session. This is a sign that momentum may be getting ready to shift to the upside. A move through $1772.40 will change the minor trend to down.

The major support is the long-term retracement zone at $1781.00 to $1757.10. It stopped the selling at $1762.20 on December 2.

The minor range is $1819.30 to $1762.20. The market is currently testing its 50% level at $1790.80.

The short-term range is $1881.90 to $1762.20. Its 50% level at $1822.10 is the primary upside target.

Daily Swing Chart Technical Forecast

The direction of the February Comex gold futures contract on Wednesday is likely to be determined by trader reaction to $1790.80.

Bullish Scenario

A sustained move over $1790.80 will indicate the presence of buyers. If this move is able to generate enough upside momentum then we could see an acceleration into $1819.30 to $1822.10.

Bearish Scenario

A sustained move under $1790.80 will signal the presence of sellers. The first downside target is $1781.00.

If $1781.00 fails as support then look for a further break into $1772.40. Taking out this level could extend the selling into a potential support cluster at $1762.20, $1761.00 and $1757.10.