Gold Price Futures (GC) Technical Analysis – Failure to Hold $1222.70 Could Trigger Break into $1210.60

Gold futures are trading lower early Wednesday as investors booked profits after last week’s run-up. The catalysts behind today’s liquidation-led pressure are increased demand for risky assets and a firmer U.S. Dollar. Traders are also paring positions ahead of today’s U.S. Federal Reserve monetary policy minutes due to be released at 1800 GMT. They are expected to offer some insight on the pace of future interest rate hikes.

At 0651 GMT, December Comex Gold futures are trading $1226.50, down $4.60 or -0.37%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1236.90 will signal a resumption of the uptrend. The next target is the main top at $1244.70. The main trend will change to down on a trade through $1184.30.

The main range is $1278.20 to $1167.10. Its retracement zone at $1222.70 to $1235.80 is providing both support and position today. Trader reaction to this zone will likely determine the near-term direction of the market.

The short-term range is $1184.30 to $1236.90. Its retracement zone at $1210.60 to $1204.40 is the nearest support zone.

Another main range is $1325.40 to $1167.10. If there is another upside breakout then its retracement zone at $1246.30 to $1264.90 will become the first upside target.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the December Comex Gold futures contract on Wednesday is likely to be determined by trader reaction to the 50% level at $1222.70.

Holding $1222.70 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into $1235.80 to $1236.90.

Taking out $1236.90 is could trigger a breakout into $1244.70 to $1246.30.

A sustained move under $1222.70 will signal the presence of sellers. This could trigger an acceleration to the downside with the next target zone $1210.60 to $1204.40.

Since the main trend is up, buyers may step in on a test of $1210.60 to $1204.40. They are going to try to produce another secondary higher bottom.