Gold Price Futures (GC) Technical Analysis – Strengthens Over $1800.00, Weakens Under $1795.00 Early Friday

Gold futures closed higher on Thursday, posting its best performance in three weeks as the U.S. Federal Reserve and the Bank of England indicated they were in no rush to raise interest rates.

The Fed on Wednesday signaled that it would stay patient on interest rate hikes and that it would start trimming its massive bond-buying program this month. Following that, the Bank of England kept interest rates on hold on Thursday, dashing expectations for a hike that would have made it the first of the world’s big central banks to raise rates after the pandemic.

On Monday, December Comex gold futures settled at $1793.00, up $29.10 or +1.65%.

The focus now shifts to Friday’s U.S. Non-Farm Payrolls report. On Thursday, U.S. jobless claims totaled 269,000 for the week ended October 30, better than the 275,000 expected by economists polled by Dow Jones. On Wednesday, the ADP National Employment Report showed private employment increased by 571,000 jobs last month after advancing by 523,000 in September.

On Friday, the U.S. Bureau of Labor Statistics report is expected to show the Non-Farm Employment Change was 455K. The Unemployment Rate fell to 4.7% and Average Hourly Earnings rose 0.4%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1815.50 will change the main trend to up. A move through $1758.50 will signal a resumption of the downtrend.

On the upside, resistance is a pair of 50% levels at $1795.00 and $1800.00.

On the downside, potential support is layered at $1780.50, $1768.30 and $1757.40. The latter is a potential trigger point for an acceleration to the downside with $1738.60 the next target, followed by $1716.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold market early Friday is likely to be determined by trader reaction to $1795.00. This also happens to be the long-term pivot price.

Bullish Scenario

A sustained move over $1795.00 will indicate the presence of buyers. The next target is $1800.00. Overcoming this level could trigger an acceleration into the minor top at $1812.70 and the main top at $1815.50. Taking out this level could lead to a test of a Fibonacci level at $1828.80.

Bearish Scenario

A sustained move under $1795.00 will signal the presence of sellers. If this move creates enough downside momentum then look for a break into $1780.50. If it fails as support, the selling could possibly extend into $1768.30, followed by a support cluster at $1758.50 – $1757.40.

The 50% level at $1757.40 is a potential trigger point for an acceleration into $1738.60, followed by $1716.00.

Side Notes

A strong jobs report will bring the Fed closer to its labor market target and its first post-pandemic rate hike. Therefore, gold’s gains could be limited and the market could sell-off.