Gold Price Futures (GC) Technical Analysis – Sustained Move Over $1779.00 Could Trigger Surge into $1795.00

Gold futures are trading higher for a second session this week on Wednesday, helped by a reversal to the downside in Treasury yields, although gains are likely being capped by a firmer U.S. Dollar.

Fundamentally, pressure is being fueled by the potential reduction in Federal Reserve asset purchases while support is being generated by inflationary pressure due to higher energy prices and weaker data coming out of China and U.S. factory output.

At 11:40 GMT, December Comex gold futures are trading $1780.50, up $10.00 or +0.56%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1801.90 will signal a resumption of the uptrend. A move through $1745.40 will change the main trend to down.

The minor trend is also up. A trade through $1760.30 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $1836.90 to $1721.10. Gold is currently straddling its 50% level or pivot at $1779.00.

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

On the downside, potential support levels are $1765.90, $1757.40 and $1751.80. These are followed by major Fibonacci levels at $1738.60 and $1716.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures market on Monday is likely to be determined by trader reaction to $1779.00.

Bullish Scenario

A sustained move over $1779.00 will signal the presence of buyers. If this move creates enough upside momentum then look for a potential acceleration to the upside with targets coming in at $1795.00, $1800.00 and $1801.90.

Bearish Scenario

A sustained move under $1779.00 will indicate the presence of sellers. This could trigger a break into the next support at $1765.90.

Buyers could come in on the first test of $1765.90, but if it fails then look for the selling to possibly extend into $1760.30, $1757.40 and $1751.80.

If $1751.80 fails then look for the pace of the selling to increase enough to challenge $1745.40, followed by $1738.60. The latter is a potential trigger point for an acceleration into $1721.10, followed closely by $1716.00.