Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1317.10 will Determine Near-Term Trend

February Comex gold futures posted a two-sided trade on Thursday before settling higher. The market continued to straddle a 3 1/2-month high as investors mulled over the Fed minutes released on Wednesday that strongly suggested the Fed would stick with its forecast of three rate hikes in 2018.

A weaker U.S. Dollar contributed to the rally, but gains may have been limited by another surge to record highs in the stock market.

The main trend is up according to the daily swing chart. Bullish traders are hoping the rally can build on the break out over the September 26 main top at $1321.00. If the rally gains traction on better-than-average volume, we could see an eventual test of the September 8 main top at $1365.80.

The old tops at $1321.00, $1312.70 and $1303.40 are new support.

The main range is $1365.80 to $1238.30. Its retracement zone is $1317.10 to $1302.10. The market is trading on the strong side of this zone, helping to give the market an upside bias. The retracement zone is new support.

The price action this week suggests buyers are trying to build a support base over $1317.10. If it fails then the 50% level at $1302.10 has to hold, or the market is in danger of correcting even further.

If the current rally forms a range then its 50% level at $1282.80 will become the primary downside target.