Gold Price Futures (GC) Technical Analysis – Shift in Momentum to Down Puts Uptrend at Risk

December Comex Gold futures are trading sharply lower as investors reacted to a stronger U.S. Dollar and increased demand for risky assets. German politics are helping to give the dollar a boost. The prospect of higher U.S. interest rates is also creating headwinds for gold.

The main trend is up according to the daily swing chart, but the trend could change to down quickly if the momentum continues. At the mid-session, the market is hovering slightly above the last swing bottom at $1269.70. Momentum is trending down.

Taking out $1269.70 will change the main trend to down. This move could trigger the downside momentum needed to challenge a series of main bottoms at $1263.80, $1262.80 and the August 8 main bottom at $1257.10.

The short-term range is $1269.70 to $1297.50. The market will have to overtake its retracement zone at $1283.60 to $1280.30 in order to turn momentum up. With the market trading at $1275.30, we’re going to call it resistance at this time.

The size of the sell-off is a bit of a surprise, given Friday’s strong close. However, this type of trade is typical during a holiday-shortened week when volume is usually below average and the major players are absent.