Gold Price Futures (GC) Technical Analysis – January 28, 2019 Forecast

Gold is inching higher on Monday, continuing Friday’s steep rally. Supporting the market is a weaker dollar. This is driving up demand for dollar-denominated gold. The U.S. Dollar is being pressured by position-squaring and selling ahead of Wednesday’s U.S. Federal Reserve interest rate decision and monetary policy announcement. Traders are anticipating a dovish message from the Fed. The degree of dovishness will determine the duration of the current gold rally.

At 0603 GMT, April Comex gold futures are trading $1308.10, up $3.90 or +0.30%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed last week when buyers took out the previous main top at $1306.50. A trade through the new main bottom at $1281.50 will change the main trend to down.

The major range was formed by the January 25, 2018 main top at $1404.70 and the $1182.70 main bottom at $1182.70 on August 16, 2018. Gold is currently trading inside its 50% to 61.8% retracement zone at $1293.60 to $1310.70. This zone is controlling the longer-term direction of gold.

Daily Technical Forecast

Based on the early price action and the upside momentum, the direction of the April Comex gold futures contract the rest of the session is likely to be determined by trader reaction to the former top at $1306.50.

Bullish Scenario

A sustained move over $1306.50 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for the rally to eventually extend into the major Fibonacci level at $1319.70. This is also a potential trigger point for an acceleration to the upside with the next target the June 14, 2018 main top at $1337.80.

On the downside, the nearest support cluster is being formed by a pair of uptrending Gann angles at $1298.50 and $1297.50. The major support is the 50% level at $1293.60.

Bearish Scenario

Bearish traders should watch the price action and read the order flow on a test of $1306.50. A break back under this level will indicate the buying is getting weaker. If sellers come in on this move then the break may extend into $1298.50 to $1297.50.

Remember that if you are shorting, you are going against the main trend and the momentum.