Gold Price Futures (GC) Technical Analysis – $1795.00 to $1828.80 Zone Controlling Near-Term Direction

Gold futures finished slightly lower on Wednesday but remained in a tight trading range on relatively low volume, suggesting investor indecision and impending volatility.

Traders essentially shrugged off mixed U.S. economic data while focusing on the direction of U.S. Treasury yields and the U.S. Dollar. Meanwhile, many of the major investors are on the sidelines ahead of Friday’s major U.S. Non-Farm Payrolls report that could influence the Federal Reserve’s tapering plans.

On Wednesday, December Comex gold futures settled at $1816.00, down $2.10 or -0.12%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower following the confirmation of Monday’s potentially bearish closing price reversal top.

A trade through $1826.50 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1781.30 will change the main trend to down.

The minor trend is also up. A trade through $1803.40 will change the minor trend to down. This will confirm the shift in momentum.

The market is currently trading inside a major retracement zone at $1800.00 to $1828.80. This zone is controlling the near-term direction of the gold market.

The short-term range is $1839.00 to $1677.90. Its retracement zone at $1795.00 to $1777.50 is another potential downside target and support area.

The combination of the two retracement zones make $1800.00 to $1795.00 the key support area.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold market on Thursday is likely to be determined by trader reaction to $1815.00.

Bullish Scenario

A sustained move over $1815.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for the buying to possibly extend into $1826.50, followed by $1828.80.

Crossing to the strong side of the Fibonacci level at $1828.80 will put the market in a position to trigger a potential breakout over the pair of main tops at $1837.50 and $1839.00.

Bearish Scenario

A sustained move under $1815.00 will signal the presence of sellers. If this move generates enough downside momentum then look for a labored break into $1803.40, $1800.00 and $1795.00.

A bearish bias could start to develop if $1795.00 is taken out with strong selling volume.