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Gold Price Futures (GC) Technical Analysis – Trade Through $1745.40 Changes Main Trend to Down

By:
James Hyerczyk
Updated: Oct 11, 2021, 01:22 UTC

The direction of December Comex gold early Monday is likely to be determined by trader reaction to $1757.40.

Comex Gold

In this article:

Gold futures went up then they went down before closing lower on Friday. The wicked price action was fueled by traders who reacted to the Non-Farm Payrolls report headline number while failing to notice the surge in U.S. Treasury yields.

Although non-farm payrolls came in lower than forecast, U.S. Treasury yields rose on the belief that the disappointing report would not slow down the Federal Reserve’s plans to begin tapering its massive stimulus in November as previously anticipated.

On Friday, December Comex gold futures settled at $1757.40, down $1.80 or -0.10%.

When yields rise, investors tend to move their money to where they can get the greatest return. This makes gold a less-desirable investment.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend changed to up when buyers took out the last swing top at $1771.50 on Friday. A trade through $1745.40 will change the main trend to down.

Gold also posted a potentially bearish closing price reversal top on Friday so we may see a shift in momentum if the chart pattern is confirmed.

Gold closed on the weak side of a pivot at $1757.40, making it resistance. Additional resistance is lined up at $1765.90, $1779.00 and the price cluster at $1795.00 to $1800.00.

On the downside, the first potential support comes in at $1738.60. If it fails to hold, we could see a sharp break into the next support at $1716.00.

Daily Swing Chart Technical Forecast

The direction of December Comex gold early Monday is likely to be determined by trader reaction to $1757.40.

Bullish Scenario

A sustained move over $1757.40 will indicate the presence of buyers. If this move creates enough upside momentum then look for a labored rally with potential targets $1765.90, $1779.00 and $1782.40.

Taking out $1782.40 could trigger a move into the next main top at $1788.40, followed by the resistance cluster at $1795.00 to $1800.00.

Bearish Scenario

A sustained move under $1757.40 will signal the presence of sellers. The first target is $1751.80, followed by the main bottom at $1745.40.

Taking out $1745.40 will change the main trend to down. This could trigger a break into $1738.60.

Counter-trend buyers could come in on a test of $1738.60, but if it fails then look for the selling to possibly extend into the next main bottom at $1721.10, followed by $1716.00.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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