Gold Price Futures (GC) Technical Analysis – Traders Straddling Key Retracement Zone at $1981.70 to $2007.10

Gold futures are trading higher shortly before the mid-session on Tuesday, but well off their highs. Earlier in the session, the market jumped over 1%, climbing back above the $2000 level breached earlier this month and broken last week.

The catalyst behind the early rally was a drop in Treasury yields and a weaker U.S. Dollar, which touched a more than two-year low against a basket of major currencies.

Position-squaring and profit-taking ahead of the release of the Fed minutes on Wednesday may have fueled the retreat from the high as well as stronger than expected U.S. housing market data.

At 14:53 GMT, December Comex gold futures are trading $2005.10, up $6.40 or +0.32%. Earlier in the session, the market touched a high of $2024.60.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2089.20 will signal a resumption of the uptrend. A move through $1874.20 will change the main trend to down.

The short-term range is $2089.20 to $1874.20. Its retracement zone at 1981.70 to $2007.10 is currently being straddled. Trader reaction to this zone could set the tone into the close.

The main range is $1690.10 to $2089.20. Its retracement zone at $1889.70 to $1842.60 is support. This zone stopped the selling at $1874.20 last week.

Daily Technical Forecast

The early price action suggests that trader reaction to $1981.70 and $2007.10 will determine the direction of the December Comex gold futures contract into the close.

Bullish Scenario

A sustained move over $2007.10 will indicate the presence of buyers. This could drive the market into a downtrending Gann angle at $2033.20. Overcoming this angle could trigger an acceleration into the next downtrending Gann angle at $2061.20.

Bearish Scenario

A sustained move under $1981.70 will signal the presence of sellers. This could trigger a sharp break into the steep uptrending Gann angle at $1938.20.