Gold Price Futures (GC) Technical Analysis – January 9, 2019 ForecastBased on the early price action, the direction of the February Comex gold market on Wednesday is likely to be determined by trader reaction to $1285.70. The support cluster at $1268.50 is the best downside target today.
Gold futures are trading lower on Wednesday, shortly before the regular session opening. The market is being pressured by rising Treasury yields and stronger demand for risky assets. Since gold pays no interest or dividends, demand is lower for the asset. Furthermore, optimism over a potential trade deal between the United States and China has led to a drop in safe-haven demand. This means that gold is overvalued at current price levels and needs to pullback into a value area.
At 1204 GMT, February Comex gold is trading $1282.20, down $3.70 or -0.29%.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been lost since the formation of the closing price reversal top on January 4.
A trade through $1300.40 will negate the closing price reversal top and signal a resumption of the uptrend.
A move through $1278.10 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction.
The major resistance zone is $1285.70 to $1312.30. This zone stopped the rally last week at $1300.40.
The short-term target is a 50% level at $1268.50.
The intermediate target is a 50% level at $1258.60.
The main target is $1251.40 to $1239.80.
Daily Technical Forecast
Based on the early price action, the direction of the February Comex gold market on Wednesday is likely to be determined by trader reaction to $1285.70.
A sustained move over $1285.70 will indicate the presence of buyers. If this move creates enough upside momentum then look for a rally into $1300.40. Taking out this level and crossing to the strong side of the steep uptrending Gann angle at $1300.50 will put gold in a bullish position.
A sustained move under $1285.70 will signal the presence of sellers. This could drive the market into $1278.10. Taking out this level will confirm the closing price reversal top. This could create the downside momentum needed to challenge the first support cluster at $1268.50.