Gold Price Futures (GC) Technical Analysis – Early Weakness Under $1757.40, Strength Over $1765.90

Gold futures finished higher on Friday, drawing support from a dip in U.S. bond yields and a weaker U.S. Dollar. The move was good enough to inch gold prices higher for the week, but the market still finished lower for the month and the quarter.

Perhaps underpinning prices was report that showed U.S. inflation ran at a fresh 30-year high in August as supply chain disruptions and extraordinarily high demand fueled ongoing price pressures, the Commerce Department reported Friday.

On Friday, December Comex gold futures settled at $1758.40, up $1.40 or +0.08%.

The core personal consumption expenditures price index, which excludes food and energy costs and is the Federal Reserve’s preferred measure of inflation, increased 0.3% for the month and was up 3.6% from a year ago. The monthly gain was slightly higher than the 0.2% Dow Jones estimate and the annual forecast of 3.5%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1788.40 will change the main trend to up. A move through $1721.10 will signal a resumption of the downtrend.

On the downside, the early support is a 50% level at $1757.40. Additional support levels are a pair of Fibonacci levels at $1738.60 and $1716.00.

On the upside, potential resistance levels are a series of 50% levels at $1765.90, $1779.00, $1795.00 and $1800.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures contract early Monday will be determined by trader reaction to $1757.40.

Bearish Scenario

A sustained move under $1757.40 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the Fibonacci level at $1738.60.

Counter-trend buyers could come in on the first test of $1738.60, but if it fails then look for the selling to possibly extend into the main bottom at $1721.10, followed by another Fibonacci level at $1716.00.

Bullish Scenario

A sustained move over $1757.40 will signal the presence of buyers. The first upside target is a 50% level at $1765.90. Taking out this level could trigger a surge into a 50% level at $1779.00.

Since the main trend is down, look for sellers on the first test of $1779.00. Overtaking it, however, could trigger an acceleration into the main top at $1788.40.

A move through $1788.40 will change the main trend to up with the next major target a pair of 50% levels at $1795.00 and $1800.00.