Gold Price Futures (GC) Technical Analysis – Bullish Traders Facing Big Challenge at $1817.50 – $1832.70

Gold futures closed slightly better on Friday in a volatile trade that saw the market both gain and lose over $18.00 within hours. The market was supported early in the session on worries over the omicron surge and hot inflation. A dip in Treasury yields, a weaker U.S. Dollar and an equity market sell-off also made gold a more attractive asset.

However, late in the session, yields came off their lows and the U.S. Dollar turned higher as investors shed riskier and commodity-based currencies. The moves drove up the safe-haven appeal of the greenback, making dollar-denominated gold a less-attractive investment.

On Friday, February Comex gold settled at $1804.90, up $6.70 or +0.37%. The SPDR Gold Shares ETF (GLD) finished at $167.81, down $0.35 or -0.21%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1815.70 will signal a resumption of the uptrend. A move through $1753.00 will change the main trend to down.

The short-term range is $1881.90 to $1753.00. Its retracement zone at $1817.50 to $1832.70 is the primary upside target.

The minor range is $1753.00 to $1815.70. Its retracement zone at $1784.40 to $1777.00 is the first downside target.

The main range is $1680.00 to $1881.90. Its retracement zone at $1781.00 to $1757.10 is the long-term support.

The combination of the minor and main retracement zones creates a potential support cluster at $1784.40, $1781.00 and $1777.00.

Short-Term Outlook

On the downside, the key area to watch early next week is $1784.00 to $1777.00. This area is controlling both the short-term and long-term directions. Since the main trend is up, buyers are likely to come in on a test of this area.

The first sign of weakness will be a failure to hold $1777.00. Taking out this level could trigger an acceleration into the major Fibonacci level at $1757.10. If this level fails then look for the possible start of a prolonged downtrend.

On the upside, the key area is $1817.50 to $1832.70. Trader reaction to this zone early could determine the near-term direction of the market.

Sellers are going to try to stop the rally in an effort to form a potentially bearish secondary lower top.

Buyers are going to try to drive the market through the short-term Fibonacci level at $1832.70 where it has room to run higher with $1881.90 the next major target.