Gold Price Futures (GC) Technical Analysis – Strengthens Over $1317.10, Weakens Under $1302.10

Gold futures surged on Friday in reaction to the plunge in the U.S. Dollar. The market has been rallying since the Fed raised rates in mid-December. Traders are saying that the rally is being fueled by concerns over future Fed rate hikes in 2018, diminished expectations of the tax reform plan on economic growth and geopolitical tensions over North Korea, the Middle East and Brexit.

February Comex Gold futures settled at $1309.30, up $12.10 or 0.93%.

The main trend is up according to the daily swing chart. The trend turned up on Friday when buyers took out $1303.40. The upside momentum created by the move puts the market in a position to challenge the October 16 main top at $1312.70, followed closely by the September 26 main top at $1321.00.

The top at $1321.00 is the trigger point for a possible acceleration over the near-term with the next major target the September 8 main top at $1365.80.

The trend will change to down on a trade through $1238.30. However, the market is in no positon to make this move. However, it is in the window of time to form a potentially bearish closing price reversal top. This chart pattern won’t change the trend to down, but it could alleviate some of the upside pressure.

The main range is $1214.50 to $1365.80. Its retracement zone is $1290.20 to $1272.30. Taking out this zone and closing above it indicates the presence of strong buyers. This zone is new support.

The short-term range is $1365.80 to $1238.30. Its retracement zone at $1302.10 to $1317.10 is currently being tested. The near-term direction of gold will be determined by trader reaction to this zone.

Overcoming $1317.10 and sustaining the move will put gold in an extremely bullish position. The daily chart indicates there is plenty of room to the upside over this level with $1365.80 the next major target.

A break back under $1302.10 will signal the presence of sellers. This could lead to additional weakness with the first target $1290.20, followed by $1272.30.