Gold Price Futures (GC) Technical Analysis –Trade Through $1851.00 Confirms Closing Price Reversal Top

Gold futures are trading nearly flat early Wednesday after posting a dramatic closing price reversal top the previous session. The chart pattern doesn’t change the trend to down, but if confirmed, it could trigger the start of a minimum 2 to 3 day correction.

The market reversed direction on Tuesday after a more than five-month high as upbeat U.S. retail sales data for October strengthened the greenback, making the dollar-denominated asset more expensive for foreign investors.

At 04:07 GMT, December Comex gold futures are trading $1855.40, up $1.30 or +0.07%.

Retail sales in the United States accelerated more than expected last month, giving the economy a lift at the start of the fourth quarter and sending the dollar to a 16-month high.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum may be getting ready to shift to the downside.

A trade through $1879.50 will negate the closing price reversal top and signal the resumption of the uptrend. A trade through $1851.00 will confirm the potentially bearish closing price reversal top and shift momentum to the downside.

On the upside, resistance is a pair of main tops at $1919.10 and $1922.00.

On the downside, potential support is a former main top at $1839.00, a Fibonacci level at $1828.80 and a short-term 50% level at $1819.00.

The major support is a pair of 50% levels at $1800.00 and $1795.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures contract on Wednesday is likely to be determined by trader reaction to $1865.30.

Bullish Scenario

A sustained move over $1865.30 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of $1879.50.

Taking out $1879.50 will indicate the buying is getting stronger. This could trigger an acceleration into $1919.00 to $1922.00 if the buying volume is strong enough.

Bearish Scenario

A sustained move under $1865.30 will signal the presence of sellers. Taking out $1851.00 will confirm the closing price reversal top and could drive the market into a series of downside targets at $1839.00, $1828.80 and $1819.00.

Since the main trend is up, buyers could come in on a test of any of these levels, but if $1819.00 fails then look for the selling to possibly extend into $1800.00 to $1795.00.