Gold Price Futures (GC) Technical Analysis – Next Upside Target Area $1284.10 to $1285.70Based on Monday’s price action and the close at $1272.50, the direction of the February Comex gold market on Wednesday is likely to be determined by trader reaction to Monday’s high at $1273.90.
Gold prices spiked to the upside on Monday in reaction to a weaker U.S. Dollar and a steep drop in U.S. Treasury yields. A plunge in U.S. equity markets also made gold an attractive safe-haven asset along with the Japanese Yen and the Swiss Franc. The gold market was closed on Tuesday due to the Christmas holiday. Because of this pend of demand due to heightened volatility in the global equity markets could trigger another surge to the upside.
On Monday, February Comex gold futures settled at $1272.50.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Monday when buyers took out last week’s high at $1270.30.
The main trend will change to down on a trade through $1236.50.
Today is the seventh day up from the last main bottom so the market begins the session inside the window of time for a closing price reversal top.
The minor trend is also up. A trade through $1245.30 will change the minor trend to down. This will shift momentum to the downside.
Daily Retracement Level Technical Analysis
The primary upside target is the contract’s 50% to 61.8% retracement zone at $1285.70 to $1312.30.
The short-term range is $1236.50 to $1273.90. Its 50% level or pivot at $1255.20 is the first downside target.
The intermediate range is $1216.80 to $1273.90. Its 50% level or pivot at $1245.40 is the second downside target.
The main support zone is $1238.20 to $1229.70.
Daily Swing Chart Technical Forecast
Based on Monday’s price action and the close at $1272.50, the direction of the February Comex gold market on Wednesday is likely to be determined by trader reaction to Monday’s high at $1273.90.
Taking out $1273.90 and sustaining the rally will indicate the buying is getting stronger. If this move generates enough upside momentum then look for the rally to extend into the July 9 main top at $1284.10, followed closely by the contract 50% level at $1285.70.
We could see sellers on the first test of $1284.10 to $1285.70. However, taking out $1285.70 could trigger an acceleration to the upside with the Fibonacci level at $1312.30 the next major upside target.
A sustained move under $1273.90 will signal the presence of sellers. If this creates downside pressure then look for a potential move into the short-term 50% level at $1255.20.
Closing Price Reversal Top
Taking out $1273.90 then turning lower for the session will put the February Comex gold market in a position to form a potentially bearish closing price reversal top.