Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1784.40 – $1777.00 Sets Near-Term Tone

Gold futures dropped sharply on Tuesday as U.S. Treasury yields jumped higher as investors looked past the economic risks posed by the Omicron coronavirus variant. Appetite for riskier assets and a firm U.S. Dollar also weighed on demand for the precious metal.

At 21:29 GMT, February Comex gold futures are trading $1789.20, down $5.40 or -0.30%. The SPDR Gold Shares ETF (GLD) settled at $167.05, down $0.04 or -0.02%.

U.S. Treasury yields rose on Tuesday as investors looked beyond deepening concern around omicron lockdowns and a blow to President Joe Biden administration’s spending bill that dented some U.S. economic growth forecasts. The price action suggests investors dampened some worries over the speed of the Federal Reserve’s projected rate hikes.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1815.70 will reaffirm the uptrend. A move through $1753.00 will change the main trend to down.

The minor range is $1753.00 to $1815.70. Its retracement zone at $1784.40 to $1777.00 is the next downside target.

The major support zone is $1781.00 to $1757.10. The upper level falls inside the minor range, making is a key price cluster.

The short-term range is $1881.90 to $1753.00. Its retracement zone at $1817.50 to $1832.70 is the primary upside target and potential resistance area.

Short-Term Outlook

The next major challenge for gold traders will be a test of $1784.40 to $1777.00. Since the main trend is up, we’re looking for buyers to step in on the initial test of this area. They are going to try to form a potentially bullish secondary higher bottom.

A trade through $1777.00 will indicate the selling pressure is getting stronger. This could trigger a further break into the major Fibonacci level at $1757.10. This is the last potential support before the $1753.00 main bottom, which is a potential trigger point for an acceleration into the September 29 main bottom at $1723.70.