Gold Price Futures (GC) Technical Analysis – Counter-Trend Buyers Stop Price Slide at $1823.50 – $1810.20

Gold futures fell 1% early Monday before a successful test of a key technical support zone stopped the price slide. The catalyst driving the market lower was optimism for a faster economic recovery amid the imminent rollout of COVID-19 vaccines in the United States. Helping to limit losses, however, were hopes for further fiscal and monetary stimulus from the Fed and government, respectively.

At 14:35 GMT, February Comex gold futures are trading $1840.30, down $3.30 or -0.18%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1879.80 will change the main trend to up. A move through $1767.20 will signal a resumption of the downtrend.

The short-term range is $1973.30 to $1767.20. Its retracement zone at $1870.30 to $1894.60 is resistance. This zone stopped the buying at $1979.80 on December 8.

The minor range is $1767.20 to $1879.80. Its retracement zone at $1823.50 to $1810.20 stopped the selling earlier today at $1820.00.

The major support is the long-term retracement zone at $1780.50 to $1705.20.

Daily Swing Chart Technical Forecast

The direction of the market over the near-term is likely to be determined by trader reaction to $1823.50.

Bullish Scenario

A sustained move over $1823.50 will indicate the presence of aggressive counter-trend buyers. The first potential upside target is a minor pivot at $1849.90. Overcoming this level could drive the gold market into $1870.30, followed by $1879.80 and $1894.60.

Bearish Scenario

A sustained move under $1823.50 will signal the presence of sellers. The first target is the minor Fibonacci level at $1810.20. This is a potential trigger point for an acceleration to the downside with the first target the long-term 50% level at $1780.50, followed by the main bottom at $1767.20.

Side Notes

We’ve said for days that trader reaction to $1823.50 to $1810.20 will likely determine the near-term direction of the market. Aggressive counter-trend buyers are coming into to try to form a potentially bullish secondary higher bottom. Sellers, on the other hand, will be trying to drive the market through this zone.

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