Gold Price Futures (GC) Technical Analysis – Strong Downside Momentum Makes $1800.00 – $1795.00 Best Target

Gold futures are trading lower on Tuesday, pressured by a rise in U.S. Treasury yields and a firmer U.S. Dollar. This helping to dampen the precious metal’s appeal as a safe-haven asset.

At 09:51 GMT, December Comex gold futures are trading $1811.90, down $13.60 or -0.75%.

Gold prices hit a 2-1/2 month high on Friday after a disappointing U.S. payrolls report boosted speculation the U.S. Federal Reserve might push back tapering its bond purchases.

However, after digesting the government’s report over the weekend, traders may have concluded that the dip in payrolls may be temporary. Furthermore, the unemployment rate fell to 5.2% as expected and Average Hourly Earnings rose 0.6%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1836.90 will signal a resumption of the uptrend. A move through $1781.30 will change the main trend to down.

The minor trend is also up. A trade through $1806.50 will change the minor trend to down. This will shift momentum to the downside.

The short-term range is $1922.00 to $1677.90. Gold is currently trading inside its retracement zone at $1800.00 to $1828.80.

The long-term retracement zone support is $1795.00 to $1716.00.

The combination of the two zones has created a potential support cluster at $1800.00 to $1795.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold market on Tuesday is likely to be determined by trader reaction to $1828.80.

Bearish Scenario

A sustained move under $1828.80 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for the selling to possibly extend into the pair of 50% levels at $1800.00 and $1795.00.

We could see a technical bounce on the first test of $1800.00, but if $1795.00 fails then look for a fast break into the pair of main bottoms at $1781.30 and $1774.30.

Bullish Scenario

A sustained move over $1828.80 will signal the presence of buyers. If this move triggers enough upside momentum then look for a test of Friday’s high at $1836.90.

Taking out $1836.90 will indicate the buying is getting stronger. This could lead to a test of a pair of main tops at $1837.50 and $1839.00. The latter is a potential trigger point for an acceleration to the upside with the June 8 main top at $1910.10 the next major target.