Gold Price Futures (GC) Technical Analysis – In Position to Breakout Above Key Retracement Zone

Gold futures hit their highest level in more than three months early Tuesday, helping to put the market in a position to post its best yearly performance in nearly a decade. Traders are saying the catalysts behind the rally are a weakening U.S. Dollar and year-end buying tied to position-squaring and thin-volume.

At 05:51 GMT, February Comex gold futures are trading $1525.60, up $6.90 or +0.45%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early Tuesday when buyers took out the previous main top at $1525.20.

A trade through $1463.00 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, short-term traders should start watching for a closing price reversal top. The chart pattern won’t change the main trend to down, but it could signal the start of a 2 to 3 day correction.

The main range is $1571.70 to $1453.10. Gold is currently testing its 50% to 61.8% retracement zone at $1512.40 to $1526.40. This zone is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $1525.60, the direction of the February Comex gold market on Tuesday is likely to be determined by trader reaction to the Fibonacci level at $1526.40.

Bullish Scenario

A sustained move over $1526.40 will indicate the presence of buyers. This is a potential trigger point for an acceleration to the upside. The first targets are main tops at $1532.40 and $1549.90. The major target is the 2019 main top at $1571.70.

Bearish Scenario

A sustained move under $1526.40 will signal the presence of sellers. If this move creates enough downside momentum then look for a test of the main 50% level at $1512.40. This is a potential trigger point for an acceleration to the downside.