Advertisement
Advertisement

Gold Price Futures (GC) Technical Analysis – Trading Between 50% Levels at $1246.60 and $1236.70

By:
James Hyerczyk
Published: Dec 17, 2018, 05:50 UTC

Based on Friday’s price action, the direction of the February Comex gold market on Monday is likely to be determined by trader reaction to Friday’s low at $1236.50.

Comex Gold

Gold futures are inching lower early Monday, but inside Friday’s range. The chart pattern suggests investor indecision and impending volatility. Underpinning the market is the slight recovery in the global equity markets. This is helping to ease the safe-haven buying of the U.S. Dollar. We’re also probably looking at some position-squaring ahead of the U.S. Federal Reserve’s interest rate and monetary policy decisions on Wednesday.

At 0532 GMT, February Comex gold futures are trading $1240.40, down $1.00 or -0.08%.

Comex Gold
Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at $1256.60 on December 10.

A trade through $1256.60 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through $1216.80.

The short-term range is $1256.60 to $1236.50. Its retracement zone at $1246.60 to $1248.90 is the primary upside target. We could see some counter-trend selling on the first test of this zone.

The intermediate range is $1216.80 to $1256.60. Its retracement zone at $1236.70 to $1232.00 is the primary downside target. This zone was tested on Friday when the market hit a low of $1236.50. Since the main trend is up, buyers could show up on a test of this zone.

The main range is $1202.40 to $1256.60. Its retracement zone at $1229.50 to $1223.10 is a major downside target. This zone has to hold as support or the main trend will change to down.

The combination of the intermediate and main retracement zones creates a potential support cluster at $1232.00 to $1229.50. This area may actually be the best value zone.

Daily Swing Chart Technical Forecast

Based on Friday’s price action, the direction of the February Comex gold market on Monday is likely to be determined by trader reaction to Friday’s low at $1236.50.

Bullish Scenario

Holding above Friday’s low at $1236.50 and the 50% level at $1236.70 will indicate that buyers are coming in to defend the trend. If this creates enough upside momentum then look for the rally to possible extend into the short-term retracement zone at $1246.60 to $1248.90.

Aggressive counter-trend sellers could come in on a test of $1246.60 to $1248.90. They may try to form a secondary lower top.

Bearish Scenario

Taking out Friday’s low at $1236.50 will indicate the selling is getting stronger. If this generates enough downside momentum then look for the selling to possibly extend into the potential support cluster at $1232.00 to $1229.50. Since the trend is up, buyers could come in on a test of this area.

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.

Did you find this article useful?

Advertisement