Gold Price Futures (GC) Technical Analysis – Main Trend Changes to Up on Trade Through $1244.70

Gold futures closed lower on Friday, but well off its low and above its opening. This suggests investors came in on weakness in an effort to defend the previous week’s low at $1221.00.

On Friday, December Comex Gold futures settled at $1232.70, down $2.60 or -0.21%. The low for the session was $1226.30.

The market was driven lower early in the session by a stronger U.S. Dollar and in anticipation of a robust U.S. GDP report. Gold rallied after lower Treasury yields drove the dollar down, while driving up foreign demand for dollar-denominated gold. Yields fell despite a strong GDP report as investors felt the 4.1 percent gain was unsustainable in the future on the thought that the trade disputes would be a drag on the economy.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1244.70 will change the main trend to up. A move through $1221.00 will signal a resumption of the downtrend.

The short-term range is $1221.00 to $1244.70. Its 50% level or pivot is $1232.90. Trader reaction to this zone could determine the direction of the gold market on Monday.

The main range is $1278.20 to $1221.00. If the trend changes to up then its retracement zone at $1249.70 to $1256.40 will become the primary upside target.

Daily Swing Chart Technical Forecast

Based on Friday’s close at $1232.70, the direction of the gold market on Monday is likely to be determined by trader reaction to $1232.90.

A sustained move over $1232.90 will indicate the presence of buyers. If this generates enough upside momentum then look for a possible challenge of the minor top at $1244.60 and the main top at $1244.70.

Taking out $1244.70 will change the main trend to up and indicate the buying is getting stronger. This would put the market in a position to challenge $1249.70 to $1256.40.

A sustained move under $1232.90 will signal the presence of sellers. Taking out Friday’s low at $1226.30 will indicate the selling is getting stronger. This could drive the market into $1221.00.

The downtrend will resume under $1221.00. This is also the trigger point for an acceleration to the downside with the psychological $1200.00 level the next major target.

The main range of $1221.00 to $1224.70 is the tightest main range in months so we could be coming close to a rally. Additionally, money managers are now net short, setting up the possibility of a strong short-covering rally.