February Comex Gold futures are trading slightly higher on Wednesday, supported by a weaker tone in the equity markets. Gains are being limited by a firm U.S. Dollar ahead of a vote on the U.S. tax overhaul plan. The market is hovering near a two-month low, but finding support due to a potential government shutdown on Friday.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, it is down seven days since the last main top which puts it in the window of time for a potentially bullish closing price reversal bottom.
A trade through $1263.20 will signal a resumption of the downtrend. This could lead to a test of a pair of main bottoms at $1261.00 and $1253.50.
The main range is $1214.50 to $1365.80. Gold is currently trading below its retracement zone at $1290.20 to $1272.30. These levels are new resistance.
Daily Technical Forecast
Based on the early price action, the direction of the gold market today is likely to be determined by trader reaction to the long-term uptrending angle at $1267.00.
A sustained move over $1267.00 will indicate the presence of buyers. This could lead to a quick test of the main Fibonacci level at $1272.30. Overcoming this level could trigger an acceleration to the upside since the next major resistance doesn’t come in until $1290.20.
A sustained move under $1267.00 will signal the presence of sellers. The next minor targets are $1263.20 and $1261.00.
The daily chart starts to open up under $1261.00 with the next target level $1253.50. The major target is another uptrending Gann angle at $1240.75.
Basically, we’re looking for an upside bias to develop over $1272.30 and for the downside bias to continue on a sustained move under $1267.00.