Gold Price Futures (GC) Technical Analysis – Late Break Through $1461.30 Could Trigger Acceleration to Downside

Gold futures are trading slightly lower late in the session on Friday. Rising U.S. Treasury yields helped push up the U.S. Dollar, driving down demand for dollar-denominated gold. The catalyst behind the jump in yields was a pair of industry reports that showed better-than-expected improvement in the U.S. factory and services sectors.

At 18:47 GMT, December Comex gold is trading $1463.10, down $0.50 or -0.04%.

IHS Markit said its “flash” purchasing managers index (PMI) for manufacturing rose to 52.2 in November from a final reading of 51.3 in October, while its preliminary services PMI increased to 51.6 this month from 50.6 last month.

Also helping to boost the greenback was a drop in the Euro. The single-currency fell after a survey showed Euro Zone business growth almost ground to a halt this month as activity in the bloc’s dominant services industry increased at a much weaker pace than expected and among manufacturers it contracted again.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A new main top was formed at $1479.20. A trade through this level will change the main trend to up. A move through $1446.20 will signal a resumption of the downtrend.

The minor trend is up. This is supporting the momentum. A trade through $1456.60 will change the minor trend to down. This will shift momentum to the downside.

The main range is $1396.40 to $1566.20. Its retracement zone at $1481.30 to $1461.30 is controlling the near-term direction of the market. Gold is currently testing the lower level of this zone.

The intermediate retracement zone resistance is $1471.00 to $1489.20. Gold is trading on the weak side of this zone.

Daily Technical Forecast

Based on the early price action and the current price at $1463.10, the direction of the December Comex gold market into the close on Friday is likely to be determined by trader reaction to the main Fibonacci level at $1461.30.

Bearish Scenario

A sustained move under $1461.30 will indicate the selling pressure is getting stronger. This could trigger a late session break into the minor bottom at $1456.60, followed by an uptrending Gann angle at $1448.00 and the main bottom at $1446.20.

Bullish Scenario

Holding above $1461.30 will signal the presence of buyers. Taking out $1471.00 could trigger a late acceleration to the upside with the main top at $1479.20 the next upside target.