Gold Price Futures (GC) Technical Analysis – Sustained Move Under $1187.50 Bearish with Next Target $1167.10

Gold futures are trading slightly lower early Friday, but there has been no follow-through to the downside following yesterday’s steep sell-off, despite strong technical downside momentum. Gold is being pressured by a stronger U.S. Dollar. The greenback is being supported by expectations of higher interest rates, solid U.S. economic data and a weaker Euro due to political turmoil in Italy.

At 0629 GMT, December Comex Gold futures are trading $1186.40, down $1.00 or -0.09%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The market is also showing signs of breaking out to the downside of its nearly two-month range. The main trend will change to up on a trade through $1215.80.

The short-term range is $1167.10 to $1220.70. Its retracement zone is $1193.90 to $1187.50. The market is currently straddling the lower or Fibonacci level of this range at $1187.50. A sustained move under this zone will help support the downside bias. Traders should consider this area new resistance.

Additional resistance is the retracement zone at $1205.90 to $1215.10.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December Comex Gold futures market on Friday is likely to be determined by trader reaction to the Fibonacci level at $1187.50.

A sustained move under $1187.50 will indicate the presence of sellers. If this triggers enough downside momentum, we could see an acceleration to the downside with the next major target coming in at $1167.10.

A sustained mover over $1187.50 will signal the selling is getting weaker, or the buying is getting stronger. This could trigger a short-covering rally into $1193.90. Overtaking this level could fuel an acceleration to the upside with $1205.90 the next target.