Gold Price Futures (GC) Technical Analysis – Bulls Need to Protect $1289.80 Pivot

Bullish gold traders had another frustrating week. Even with the dovish Fed minutes driving down Treasury yields and the U.S. Dollar Index plunging to its lowest level since October 13, there weren’t enough gold buyers in the market to trigger a follow-through rally after the previous week’s solid gains.

Gains were probably limited by strong demand for higher-yielding assets and expectations of further tightening by the U.S. in December. The chart pattern suggests there is just enough buying coming in to keep the market relevant, but not enough to fuel a breakout to the upside. Low holiday volume may have also kept many of the major players are the sidelines.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart. A trade through $1301.70 will reaffirm the uptrend. This could generate the upside momentum needed to challenge the October 16 main top at $1312.70 and the October 26 main top at $1321.00.

On the downside, a trade through $1274.40 will change the main trend to down. This could trigger a further decline into the October 27 main bottom at $1268.10 and the October 6 main bottom at $1267.00.

The short-term range is $1267.00 to $1312.70. Its 50% level or pivot is $1289.80. The market has been straddling this level since mid-October. The close over this price is giving the gold market a slight upside bias as we begin the new week.

The main range is $1365.80 to $1267.00. If a rally ever gains traction then its retracement zone at $1316.40 to $1328.10 will become the primary upside target.

Daily Swing Chart Forecast

Based on Friday’s close at $1291.80, the direction of the gold market this week is likely to be determined by trader reaction to the pivot at $1289.80.

A sustained move over $1289.80 will indicate the presence of buyers. The first upside target is $1301.70. If this level is taken out with conviction then look for the rally to extend into the next main top at $1312.70, followed by the main 50% level at $1316.40 and another main top at $1321.00.

A sustained move under $1289.80 will signal the presence of sellers. If the selling volume increases on this move then look for a possible break into the main bottom at $1274.40. If this price fails and the trend changes to down then look for further weakness into $1268.10 and $1267.00.