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Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1823.50 – $1810.20 Sets Near-Term Tone

By:
James Hyerczyk
Published: Dec 10, 2020, 11:03 UTC

The direction of the February Comex gold futures contract over the near-term will be determined by trader reaction to $1823.50 to $1810.20.

Gold

In this article:

Gold futures are inching lower on low volume on Thursday, but holding above yesterday’s low following a steep sell-off in the previous session, as a breakthrough in long-running U.S. fiscal stimulus negotiations remained elusive.

U.S. lawmakers voted to extend federal government funding by a week to give them more time to agree on a coronavirus relief package. But U.S. Senate Majority Leader Mitch McConnell said they were still looking for a way forward.

At 10:44 GMT, February Comex Gold futures are trading $1837.90, down $0.60 or -0.03%.

Later today, investors will get the opportunity to react to the European Central Bank’s monetary policy decision, due at 12:45 GMT, where it is expected to unveil fresh stimulus measures, and U.S. weekly claims data, due at 13:30 GMT.

Gold prices could continue to drift sideways to lower over the near-term unless there is another injection of U.S. fiscal stimulus, or stronger signals out of the Federal Reserve with regards to boosting inflationary pressures.

Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1767.20 will signal a resumption of the downtrend. The main trend will change to up on a trade through the nearest main top at $1973.30.

The minor trend is up. A trade through $1824.80 will change the main trend to down. Taking out $1879.80 will indicate the short-covering rally is getting stronger.

The short-term range is $1973.30 to $1767.20. Its retracement zone at $1870.30 to $1894.60 is resistance. This zone stopped the rally at $1879.80 on Tuesday, helping to form a secondary lower top.

The minor range is $1767.20 to $1879.80. Its retracement zone at $1823.50 to $1810.20 is potential support.

The major support is the long-term retracement zone at $1780.50 to $1705.20. This zone stopped the selling at $1767.20 on November 30.

Daily Swing Chart Technical Forecast

The direction of the February Comex gold futures contract over the near-term will be determined by trader reaction to $1823.50 to $1810.20.

Aggressive counter-trend traders are going to come in on a test of this zone in an effort to form a potentially bullish secondary higher bottom.

Bearish Trend traders are going to try to drive through $1810.20 in an effort to trigger an acceleration into $1780.50 to $1767.20.

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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