Gold Price Futures (GC) Technical Analysis – Big Decision for Short-Sellers on Test of $1757.70 – $1776.50

Gold futures settled slightly lower on Thursday but remained within striking distance of a key technical retracement area that could determine the near-term direction of the market.

Helping to underpin gold prices were the easing of expectations of an early taper of the Federal Reserve’s asset purchases. Nonetheless, gold was capped by stronger-than-expected producer price data and good labor market news from the U.S. weekly initial claims report.

On Thursday, December Comex gold settled at $1781.80, down $1.50 or -0.09%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1677.90 will signal a resumption of the downtrend. A move through $1837.50 will change the main trend to up.

On the downside, support is a long-term Fibonacci level at $1716.00, followed by a minor Fibonacci level at $1708.00.

The short-term range is $1837.50 to $1677.90. Its retracement zone at $1757.70 to $1776.50 is the primary upside target. This area is controlling the near-term direction of the market.

Additional resistance is a pair of 50% levels at $1795.00 and $1800.60.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures contract early Friday is likely to be determined by trader reaction to $1757.70.

Bearish Scenario

A sustained move under $1757.70 will indicate the presence of sellers. If this move creates enough downside momentum then look for a possible break into a series of retracement levels at $1718.70, $1716.00 and $1708.00.

Bullish Scenario

A sustained move over $1757.70 will signal the presence of aggressive counter-trend buyers. Taking out $1759.60 will indicate the buying is getting stronger. This could trigger a short-covering rally into $1776.50.

Side Notes

Besides the resistance zone at $1757.70 to $1776.50 that could attract new sellers, traders should pay attention to $1763.10. This is last week’s close. Finishing over this level, will form a weekly closing price reversal bottom.