Gold Price Futures (GC) Technical Analysis – Fed Comments Supporting Potentially Bullish Chart Pattern

Gold jumped late in the session on Wednesday after the U.S. Federal Reserve held interest rates steady following its two-day meeting this week. This move was widely expected. What surprised traders was the Federal Open Market Committee’s (FOMC) indication that no action is likely next year amid persistently low inflation.

At 21:43 GMT, February Comex gold is trading $1479.50, up $11.40 or +0.78%.

Through the “dot plot” of individual members’ future projections, the FOMC indicated little chance of a cut or increase in 2020.

Gold is going up because no rate hikes could mean a steady to lower U.S. Dollar, which would make dollar-denominated gold a more attractive investment.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1489.90 will signal a resumption of the uptrend after a three day setback. The new main bottom is $1463.00. A trade through this bottom will change the main trend to down.

The short-term range is $1456.60 to $1489.90. Its retracement zone at $1473.30 to $1469.30 is support.

The main range is $1525.20 to $1453.10. Its retracement zone at $1489.20 to $1497.70 is the first upside target and potential resistance. Overtaking this zone, however, could trigger a breakout to the upside.

Short-Term Recap

Based on Wednesday’s price action and the current price at $1479.50, the market is in a position to settle on the strong side of a short-term uptrending Gann angle at $1476.60 and the short-term retracement zone at $1473.30 to $1469.30. This is a potentially bullish chart pattern especially since $1463.00 is the second higher bottom since the main bottom was formed on November 12 at $1453.10.

If the upside momentum continues then look for a surge into $1489.20 to $1489.90. Watch for sellers on the first test of this area.

Taking out $1489.90 could trigger a rally into a potential resistance cluster at $1497.70 to $1498.20. Look for sellers again.

The downtrending Gann angle at $1498.20 is a potential trigger point for an acceleration to the upside.

Side Notes

The chart pattern and the Fed’s comments are potentially bullish, however, gains could be limited over the near-term if the United States and China reach a trade deal before the new tariffs are supposed to kick in on December 15, or if President Trump announces a delay in those tariffs on Chinese imports.