Gold Price Futures (GC) Technical Analysis – Buyers Could Step in at $1781.00 – $1757.10 Early Wednesday
Gold futures are trading at their lowest level since November 4 late Tuesday as the renomination of U.S. Federal Reserve Chair Jerome Powell fueled bets of faster interest rate hikes, bolstering the U.S. Dollar and Treasury yields.
At 20:17 GMT, February Comex gold futures are trading $1792.20, down $16.90 or -0.93%.
The two day sell-off indicates investors are betting Powell will step up the pace at which the central bank is normalizing monetary policy to better grapple with surging consumer prices. Three Fed officials also suggested over the past week that the issue of increasing the pace of tapering will be addressed at the Fed’s mid-December policy meeting.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the confirmation of the daily closing price reversal top on November 16.
A trade through $1881.90 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1761.00 will change the main trend to down.
The market is currently trading on the weak side of a pair of 50% levels at $1802.80 and $1821.50, making them potential resistance.
The main range is $1680.00 to $1881.90. Its retracement zone at $1781.00 to $1757.10 is the primary downside target. Since the main trend is up, we’re looking for new buyers to show up on a test of this area.
Daily Swing Chart Technical Forecast
The direction of February Comex gold into the close on Tuesday and early Wednesday is likely to be determined by trader reaction to $1802.80.
A sustained move under $1802.80 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into $1781.00 to $1757.10.
The 50% to 61.8% retracement zone at $1781.00 to $1757.10 is a potential value area. Don’t be surprised if new buyers show up on a test of this area.
Taking out $1757.10, however, will indicate the selling pressure is getting stronger. This could trigger an acceleration into $1723.70.
A sustained move over $1802.80 will signal the presence of buyers. If this move creates enough upside momentum, the market could rally into a pair of 50% levels at $1821.50 and $1833.10.