Gold Price Futures (GC) Technical Analysis – Testing Major Retracement Zone at $1512.40 to $1526.40; Ripe for Closing Price Reversal Top

Gold futures are inching higher early Friday, putting it in a position to post its best week in more than four months. Support for bullion is being generated by a weaker U.S. Dollar, which is driving up foreign demand for dollar-denominated gold. Perhaps putting a lid on prices is rising risk appetite, which is being fueled by optimism over an interim U.S.-China trade deal.

At 05:46 GMT, February Comex gold is trading $1517.10, up $2.70 or +0.18%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out Thursday’s high. The next upside target is the main top at $1525.20. The main trend will change to down on a move through $1463.00.

The main range is $1571.70 to $1453.10. Its retracement zone at $1512.40 to $1526.40 is currently being tested. This zone is controlling the longer-term direction of the market.

On the downside, the nearest support is the retracement zone at $1495.30 to $1477.30.

Daily Swing Chart Technical Forecast

Given the spike in prices and the test of a potential resistance zone, the direction of the February Comex gold market on Friday is likely to be determined by trader reaction to Thursday’s close at $1514.40.

Bullish Scenario

A sustained move over $1514.40 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the main top at $1525.20, followed closely by the Fibonacci level at $1526.40.

Sellers could come in on the first test of $1526.40, however, it’s also a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $1514.40 will signal the presence of sellers. This could drive the market into the 50% level at $1512.40. This is a potential trigger point for an acceleration to the downside with $1495.30 the next major downside target.

Closing Price Reversal Top Possible

A close under $1526.40 will form a closing price reversal top. This chart pattern will indicate the selling is greater than the buying at current price levels.

If confirmed next week, this chart pattern could trigger the start of a 2 to 3 day break or a 50% retracement of the rally from $1463.00.