Gold Price Futures (GC) Technical Analysis – Straddling Key Pivot at $1205.90

Gold futures are trading in a tight range early Wednesday as investors position themselves ahead of the Fed’s interest rate decision, monetary policy statement and press conference. Volume and liquidity are extremely low.

The Fed is widely expected to raise its benchmark rate 25 basis points. This news has already been priced into the market. A dovish monetary policy statement could trigger a short-covering rally. The headline shouldn’t move the market. The language in the Fed statement and the commentary during the press conference should set the tone for the day.

At 0523 GMT, December Comex Gold is trading $1206.70, up $1.60 or +0.13%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1196.00 will signal a resumption of the downtrend. This could extend into other main bottoms at $1192.70 and $1189.50.

A trade through $1215.80 will change the main trend to up. Trades through main tops at $1218.00 and $1220.70 will reaffirm the uptrend.

The market has been trapped inside a pair of retracement zones since mid-August. On the downside, the support zone is $1193.90 to $1187.50. On the upside, the first resistance zone is $1205.90 to $1215.10, followed by $1222.70 to $1235.80.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December Comex Gold futures contract on Wednesday is likely to be determined by trader reaction to the 50% level at $1205.90.

A sustained move over $1205.90 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into $1215.10 then a series of potential resistance levels at $1215.80, $1218.00, $1220.70 and $1222.70.

The trigger point for an acceleration to the upside is $1222.70.

A sustained move under $1205.90 will signal the presence of sellers. The daily chart indicates there is plenty of room to the downside with targets coming in at $1193.90, $1192.70, $1189.50 and $1187.50.

The trigger point for an acceleration to the downside is $1187.50.