Gold Price Futures (GC) Technical Analysis – Strengthens Over $1842.90, Weakens Under $1831.80

Gold futures are trading flat on Thursday as weaker than expected U.S. consumer inflation data dampened the bullion’s appeal as a hedge against inflation. However, the market remains underpinned by expectations for a softer U.S. Dollar and lower Treasury yields. Dovish comments from Fed Chair Jerome Powell also provided some support.

At 12:47 GMT, April Comex gold futures are trading $1842.50, down $0.20 or -0.01%.

In economic news, U.S. consumer prices rose moderately in January as higher gasoline prices were blunted by a slump in airline fares amid a relentless pandemic, tempering expectations for a sustained acceleration in inflation this year.

In other news, U.S. Federal Reserve Chair Jerome Powell on Wednesday called for a broad national effort to get Americans back to work after the pandemic.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1878.90 will change the main trend to up. A move through $1784.60 will signal a resumption of the downtrend.

The first minor range is $1878.90 to $1784.60. The market is currently straddling its retracement zone at $1831.80 to $1842.90.

The second minor range is $1784.60 to $1856.60. Its retracement zone at $1820.60 to $1812.10 is a second support zone.

The short-term range is $1966.80 to $1784.60. Its 50% to 61.8% retracement zone at $1875.70 to $1897.20 is resistance. The upper or Fibonacci level at $1897.20 is also a potential trigger point for an acceleration to the upside.

The major support is a long-term retracement zone at $1787.30 to $1711.70. Its zone stopped the selling at $1784.60 on February 4 and at $1771.30 on November 30.

Daily Swing Chart Technical Forecast

The early price action on Thursday suggests the direction of the market will be determined by trader reaction to the minor Fibonacci level at $1842.90.

Bullish Scenario

A sustained move over $1842.90 will indicate the presence of buyers. The first upside target is yesterday’s high at $1856.60, followed by a short-term 50% level at $1875.70 and a main top at $1878.90.

Bearish Scenario

A sustained move under $1842.90 will signal the presence of sellers. This could lead to a labored break with potential downside targets lined up at $1831.80, $1820.60 and $1812.10.

The Fibonacci level at $1812.10 is a potential trigger point for an acceleration into a potential support cluster at $1787.30 to $1784.60.