Gold Price Futures (GC) Technical Analysis – Taking Out $1954.80 With Conviction Could Trigger Surge into $1981.70The direction of the December Comex gold futures contract on Wednesday is likely to be determined by trader reaction to the 50% level at $1954.80.
Gold futures are inching higher in a lackluster trade shortly after the opening on Wednesday. A slight setback in the dollar and slightly lower Treasury yields could be behind the move. Most traders agree that gold isn’t likely to make a major move this week until after the European Central Bank (ECB) announces its monetary policy decisions on Thursday. Today’s price action could be a reflection of day traders trying to make a market.
At 13:11 GMT, December Comex gold is trading $1945.20, up $2.00 or +0.10%.
According to reports, some investors sold gold to offset losses from a recent selloff in equites, but worries about a delay in the development of a coronavirus vaccine limited the metal’s declines. Today’s rebound in the stock market could also be dampening the U.S. Dollar’s appeal as a safe-haven asset.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a trade through $1908.40. Taking out $2001.40 will signal a resumption of the uptrend.
On Tuesday, gold posted a minor reversal bottom, which could be a sign that investors are defending the main bottom at $1908.40 in an effort to prevent a change in trend.
On the downside, the major support or value area is $1889.70 to $1842.60.
The minor range is $1908.40 to $2001.20. Its 50% level at $1954.80 is the next upside target.
The short-term range is $2089.20 to $1874.20. Its retracement zone at $1981.70 to $2007.10 is a key resistance area.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the December Comex gold futures contract on Wednesday is likely to be determined by trader reaction to the 50% level at $1954.80.
A sustained move over $1954.80 will indicate the presence of buyers. This could trigger an acceleration into the 50% level at $1981.70. Overtaking this level will indicate the buying is getting stronger with the next targets a main top at $2001.20 and a Fibonacci level at $2007.10.
A sustained move under $1954.80 will signal the presence of sellers. This could lead to a retest of the minor bottom at $1911.70, followed by the main bottom at $1908.40.