Gold Price Futures (GC) Technical Analysis – January 14, 2019 Forecast

Gold futures are trading higher on Monday, supported by a weaker U.S. Dollar. The catalyst behind the strength is weaker-than-expected trade balance data from China. This news drove down demand for risky assets, spurring a drop in U.S. Treasury yields due to safe-haven buying. Lower Treasury yields made the U.S. Dollar a less-desirable asset. Furthermore, last week the Fed said in its minutes that it would consider taking a break from its tightening cycle if the global economy continued to weaken.

At 1300 GMT, February Comex gold futures are trading $1295.50, up $5.00 or +0.47%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, the market has been trading sideways since forming a closing price reversal top on January 4 after hitting its highest level in 6 months.

The short-term range is $1300.40 to $1278.10. The market has been trading inside this range for six sessions. This tends to indicate investor indecision, but more importantly, it signals impending volatility.

The 50% level or mid-point of this range is $1289.20. This level has been providing support the last three sessions.

The major support is a 50% level at $1285.70. The major upside target and resistance is $1312.30.

Another short-term range is $1236.50 to $1300.40. If prices collapse then its 50% level at $1268.50 will become the primary downside target.

Daily Technical Forecast

Based on the early price action, the direction of the February Comex gold futures contract the rest of the session is likely to be determined by trader reaction to the 50% level at $1289.20.

Bullish Scenario

A sustained move over $1289.20 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to make a run at $1300.40. This is the trigger point for a potential acceleration to the upside with $1312.30 the next major target.

Bearish Scenario

A failure to hold $1289.20 will signal the presence of sellers. This is followed by the major 50% level at $1285.70. Taking out this level could trigger an acceleration to the downside with $1278.10 the next target, followed closely by an uptrending Gann angle at $1274.50.