Gold Price Futures (GC) Technical Analysis – Bulls Being Rejected at $1933.20 to $1972.40 Retracement Zone

Gold futures are down over 1% on Wednesday after giving back all of its earlier gains, following a test of a two-month high earlier in the session. The catalyst driving the selling pressure is a recovery in the U.S. Dollar, which may have been fueled by the outcome of the U.S. Senate run-off election in Georgia.

At 15:45 GMT, February Comex gold futures are trading $1931.80, down 22.60 or -1.16%.

The U.S. Dollar Index recouped losses from a dive to 2-1/2 year lows, making dollar-denominated gold a relatively less attractive bet for those holding foreign currencies.

Also weighing on gold were higher U.S. Treasury yields, which increase the opportunity cost of holding non-interest bearing bullion.

Early in the day, the 10-year Treasury yield jumped above 1 % for the first time since the pandemic-triggered rout in March as traders awaited results from the Senate runoff races in Georgia.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the intraday reversal suggests momentum may be getting ready to shift to the downside. A trade through $1962.50 will signal a resumption of the uptrend. The main trend changes to down on a move through the nearest swing bottom at $1820.00.

The main range is $2099.20 to $1767.20. Its retracement zone at $1933.20 to $1972.40 stopped the rally on Wednesday.

The minor range is $1820.00 to $1862.50. Its 50% level at $1891.30 is the first downside target.

The short-term range is $1767.20 to $1962.50. Its retracement zone at $1864.90 to $1841.80 is the primary downside target area.

Daily Swing Chart Technical Forecast

The direction of the February Comex gold futures contract into the close is likely to be determined by trader reaction to the 50% level at $1933.20.

Bearish Scenario

A sustained move under $1933.20 will indicate the selling pressure is getting stronger. If this move creates enough downside pressure, we could see an acceleration into $1891.30 over the near-term.

Bullish Scenario

A sustained move over $1933.20 could trigger a short-covering rally into the close. Potential upside targets include yesterday’s close at $1954.40, today’s intraday high at $1962.50 and the main Fibonacci level at $1972.40.

Side Notes

A close under $1954.40 will form a potentially bearish closing price top. If confirmed, this could trigger the start of a 2 to 3 day retracement of its recent rally with $1891.30 the first downside target level.