Gold Price Futures (GC) Technical Analysis – Momentum Buyers Targeting $1817.50 – $1832.70 Retracement Zone

Gold futures are trading higher on Friday, with bullish traders taking advantage of a weaker U.S. Dollar, despite attempts by major central banks to stem rising inflation. Two days of solid gains have put the precious metal in a position to post its best weekly performance since mid-November.

At 10:27 GMT, February Comex gold futures are trading at $1809.10, up $10.90 or +0.61%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $168.17, up $2.02 or +1.22%.

The U.S. Dollar Index is set to post a weekly decline after hitting a one-week low on Thursday, after the Fed said it would pave the way for three interest rate increases by the end of 2022.

Gold prices have jumped since Wednesday’s Fed announcements because the rate hike prospects had been priced in before news. So essentially, we have a “sell the rumor, buy the fact” situation.

But if you want to dig deeper into the rally, the U.S. 10-year real yield is moving deeper into negative territory, allowing gold to benefit from high inflation, which is outweighing the plans of the hawkish Fed.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Thursday when buyers took out the last swing top at $1792.80. It was reaffirmed when they overtook $1794.30, fueling an acceleration to the upside. A trade through $1753.00 will change the main trend to down.

The major support is the long-term retracement zone at $1781.00 to $1757.10.

The short-term range is $1881.90 to $1753.00. Its retracement zone at $1817.50 to $1832.70 is the primary upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the February Comex gold futures contract on Friday is likely to be determined by trader reaction to $1798.20.

Bullish Scenario

A sustained move over $1798.20 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the short-term 50% level at $1817.50, followed closely by a minor top at $1819.30.

Taking out $1819.30 will indicate the buying is getting stronger with the short-term Fibonacci level at $1832.70 the next likely target.

Despite the strong upside momentum, we could see profit-taking on the first test of $1817.50 – $1832.70.

Bearish Scenario

A sustained move under $1798.20 will signal the presence of sellers. This could trigger an intraday break into a pair of 50% levels at $1782.00 – $1781.00. Since the main trend is up, buyers could come in on a test of this support cluster.