Gold Price Futures (GC) Technical Analysis – Huge Breakout Potential Over $1839.00 Main Top

Gold futures are edging higher on Monday as investors continue to build on last week’s strong performance. Driving the market higher is the dovish commitment toward rate hikes from the Reserve Bank of Australia (RBA), U.S. Federal Reserve and the Bank of England (BoE).

At 13:44 GMT, December Comex Gold futures are trading $1820.70, up $3.90 or +0.21%.

Helping to cap the market’s gains today are rising U.S. yields although expectations that key central banks will keep interest rates low in the near term limited losses of the non-yielding asset.

The limited price action suggests investors may already be preparing for Wednesday’s U.S. consumer inflation (CPI) report. It is expected to rise, but if it’s too hot, it may prompt the Fed to raise rates sooner-than-expected. This would be bearish for gold. Last week, the Fed stuck with its forecast for “transitory” inflation.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The next potential targets are a series of main tops at $1836.90, $1837.50 and $1839.00. The latter is a potential trigger point for an acceleration to the upside. A trade through $1758.50 will change the main trend to down.

The market is currently trading on the strong side of a long-term retracement zone at $1795.00 to $1716.00, making its support.

The market is also trading inside the main retracement zone at $1800.00 to $1828.80.

The 50% levels at $1800.00-$1795.00 form a solid support area. This zone is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the December Comex Gold market into the close on Monday will be determined by trader reaction to $1828.80. The market is currently in an uptrend an approaching this level.

Bullish Scenario

A sustained move over $1828.80 will indicate the presence of buyers. This will indicate the buying is getting stronger. This could trigger a surge into the main tops at $1836.90, $1837.50 and $1839.00. The latter is a potential trigger point for an acceleration to the upside. The daily chart shows no major resistance until $1919.10 to $1922.00.

Bearish Scenario

The inability to sustain a rally over $1828.80 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the major support zone at $1800.00 – $1795.00.