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Gold Price Futures (GC) Technical Analysis – Best Value Zone $1533.20 to $1514.30

By:
James Hyerczyk
Updated: Jan 10, 2020, 08:30 UTC

The closing price reversal top on January 8 and its subsequent confirmation on January 9 shifted momentum to the downside. This often leads to a 2 to 3 day counter-trend sell-off or a 50% to 61.8% retracement zone of the last rally.

Comex Gold

Gold prices are edging lower on Friday as investors continue to discard the so-called “safe-haven” asset in the wake of the de-escalation in U.S.-Iran tensions and increasing appetite for riskier assets. A jump in U.S. Treasury yields is also helping to make the U.S. Dollar a more attractive asset while weighing on foreign demand for dollar-denominated gold.

At 06:34 GMT, February Comex gold futures are trading $1548.40, down $5.90 or -0.38%.

 Comex Gold
Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $1613.30 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at $1463.00. This is followed by a pair of main bottoms at $1456.60 and $1453.10.

The closing price reversal top on January 8 and its subsequent confirmation on January 9 shifted momentum to the downside. This often leads to a 2 to 3 day counter-trend sell-off or a 50% to 61.8% retracement zone of the last rally.

The minor trend is down. It turned down on January 8 when sellers took out the minor bottom at $1557.00. This move also signaled a shift in momentum to down.

The main range is $1453.10 to $1613.30. Its retracement zone at $1533.20 to $1514.30 is the downside target.

Daily Swing Chart Technical Forecast

Traders should prepare for two moves.

The first is a further decline into $1533.20 to $1514.30. Look for buyers on the first test of this zone. Trader reaction to a test of this zone will determine the near-term direction of the market.

The second move to watch for is the retracement of the break from $1613.30 to $1541.00. Its retracement zone at $1577.20 to $1585.70 is the upside target. Counter-trend sellers could come in on this move. They will be trying to form a secondary lower top.

In the absence of any escalation of the situation in the Middle East, the catalyst behind the price action on Friday is likely to be the U.S. Non-Farm Payrolls report, due to be released at 13:30 GMT.

Look for gold to break into the support zone if the report is strong. Treasury yields should rise along with the U.S. Dollar and demand for risky assets.

A weaker-than-expected report could send gold prices into the upside retracement zone.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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