Gold Price Futures (GC) Technical Analysis – Short-Term Consolidation Indicating Impending Volatility

Gold futures are trading flat early Friday while consolidating inside a tight range for a fifth session. The price action suggests investor indecision and impending volatility. The catalysts underpinning prices are the Federal Reserve’s dovish monetary policy stance and the substantial U.S. pandemic relief package announced by President-elect Joe Biden Thursday evening.

At 07:45 GMT, February Comex gold futures are trading $1849.90, down $1.50 or -0.08%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but the consolidating chart pattern suggests momentum may be getting ready to shift to the upside.

A trade through $1817.10 will signal a resumption of the downtrend. The main trend will change to up on a move through $1962.50.

The minor trend is also down. A trade through $1864.00 will change the minor trend to up. This will shift momentum to the upside.

The short-term range is $1767.20 to $1962.50. Its 50% level at $1864.90 is resistance.

The minor range is $1962.50 to $1817.10. Its 50% level at $1889.80 is the first upside target. It’s also a potential trigger point for an acceleration to the upside.

The main upside target zone is $1933.20 to $1972.40. On the downside, the major long-term support zone is $1780.50 to $1705.20.

Daily Swing Chart Technical Forecast

The direction of the February Comex gold market on Friday is likely to be determined by trader reaction to $1864.90.

Bearish Scenario

A sustained move under $1864.90 will indicate the presence of sellers. If this move creates enough downside momentum then look for sellers to take out $1817.10. This could trigger a sharp break into $1780.50 then $1767.20.

Bullish Scenario

A sustained move over $1864.90 will signal the presence of buyers. This is a potential trigger point for a surge into $1889.80. Since the main trend is down, sellers could come in on the first test of this level. Taking out this level could trigger an acceleration to the upside with the first target $1933.20.