Gold Price Futures (GC) Technical Analysis – Early Direction Will Be Determined by Reaction to 50% Level at $1205.90

Gold futures finished lower on Tuesday, but inside the previous day’s range, suggesting investors indecision and impending volatility. The price action was influenced by a steady U.S. Dollar amid concerns of an escalation in global trade tensions after the United States imposed fresh tariffs on China, and it retaliated with new tariffs on U.S. goods.

December Comex Gold settled at $1202.90, down $2.90 or -0.24%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending low since the formation of the closing price reversal top at $1218.00 on September 13. Additionally, this top is also a secondary lower top when compared to the main top at $1220.70 from August 28. This could be another sign that the selling is greater than the buying at current price levels.

A trade through $1218.00 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1192.70 will negate a closing price reversal bottom and change the main trend to down.

The direction of the gold market is also being controlled by a pair of retracement zones. On the upside, the 50% to 61.8% retracement zone is $1205.90 to $1215.10. On the downside, the retracement zone providing support is $1193.90 to $1187.50. Holding between these retracement zones also indicates investor indecision and impending volatility.

Daily Swing Chart Technical Forecast

Based on Tuesday’s close at $1202.90, the direction of the December Comex Gold futures contract early Wednesday is likely to be determined by trader reaction to the 50% level at $1205.90.

A sustained move under $1205.90 will indicate the presence of sellers. It his creates enough downside momentum, we could see a break into $1193.90 to $1187.50. The latter is also the trigger point for an acceleration to the downside.

A sustained move over $1205.90 will signal the presence of buyers. If this move generates enough upside momentum, we could see a drive into $1215.10 to $1222.70. The latter is the trigger point for an acceleration to the upside.