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Gold Price Futures (GC) Technical Analysis – Rising Support Base Suggests Accumulation Taking Place

Based on Friday’s price action and the close at $1481.20, the direction of the February Comex gold futures contract on Monday is likely to be determined by trader reaction to the Fibonacci level at $1477.30.
James Hyerczyk
Comex Gold

Gold futures finished higher on Friday despite the jump in demand for risky assets after the United States and China announced their trade deal, and the huge victory by U.K. Prime Minster Boris Johnson’s Conservative Party in the country’s general election.

The market reached an intraday low and rallied into the close as concerns over the details of the deal encouraged investors to shed higher-yielding assets late in the session. Washington politics may have also played a role in the late rally when a committee chaired by U.S. House Democrats voted to bring articles of impeachment against President Trump.

On Friday, February Comex gold settled at $1481.20, up $8.90 or +0.60%.

Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1491.60 will signal a resumption of the uptrend. A trade through $1463.00 will change the main trend to down.

The “three-higher highs” and the “two-higher lows” could be a sign of accumulation. The longer the market remains in the current sideways to higher range, the greater the size of the rally if buyers decide to take the market that way.

The short-term range is $1453.10 to $1491.60. Its retracement zone at $1472.30 to $1467.80 is support.

The main range is $1525.20 to $1453.10. Its 50% level at $1489.10 is resistance. This level has essentially stopped two rallies since December 1.

The first major retracement zone is $1495.30 to $1477.30. This zone is controlling the near-term direction of the market.

If there is a breakout over the 50% level at $1495.30 then look for the rally to possibly extend into the next major retracement zone at $1512.40 to $1526.40.

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Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at $1481.20, the direction of the February Comex gold futures contract on Monday is likely to be determined by trader reaction to the Fibonacci level at $1477.30.

Bullish Scenario

A sustained move over $1477.30 will indicate the presence of buyers. If this move can generate enough upside momentum then look for the rally to possibly extend into the 50% level at $1489.10, the minor top at $1491.60 and the 50% level at $1495.30. The latter is a potential trigger point for an acceleration into the next 50% level at $1512.40.

Bearish Scenario

A sustained move under $1477.30 will signal the presence of sellers. This could lead to a labored break with potential targets coming in at $1472.30 and $1467.80.

If $1467.80 fails then the next downside targets are the main bottoms at $1463.00, $1456.60 and $1453.10.

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