Gold Price Futures (GC) Technical Analysis – Trend Up, but Buyers Looking for Value

Gold futures are trading lower early Monday after a volatile trade last week. Like crude oil traders, gold traders are also licking their wounds after a wicked reversal on January 8. With losses in both directions and option premiums skewed due to the excessive volatility, it may take a few days for the impact of the heightened volatility to dissipate.

At 03:41, February Comex gold is trading $1557.50, down $2.60 or -0.17%.

The price action since Christmas week has been impressive. However, despite several huge volume days, open interest hardly moved.

What’s most interesting about the entire rally in gold is that the move paid off for those buying before the renewed tensions between the United States and Iran. Those who bought when Iran fired their missiles are losing money.

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 on January 8 and the subsequent confirmation of the chart pattern the next day.

A trade through $1613.30 will signal a resumption of the uptrend. The trend will change to down on a move through $1463.00.

The minor trend is down. It turned down when $1557.00 failed as support. This move confirmed the shift in momentum. Taking out $1541.00 will reaffirm the minor trend.

The short-term range is $1613.30 to $1541.00. Its retracement zone at $1577.20 to $1585.70 is the next upside target.

The main range is $1453.10 to $1613.30. Its retracement zone at $1533.20 to $1514.30 is the next downside target.

Daily Swing Chart Technical Forecast

Gold traders have two choices: Chase a rally back to $1577.20 to $1585.70 or play for a break into $1533.20 to $1514.30.

A rally back to $1577.20 to $1585.70 may be necessary to bring in the next wave of sellers. On the first break, the longs exited. The rally back to the retracement zone will give traders a chance to get short. However, there is always the possibility that buyers overtake this area and retest $1613.30.

A break into $1533.20 to $1514.30 will give bullish traders a chance to buy at reasonable prices. The logic behind new buyers entering on a test of this zone is as follows. If you didn’t buy at $1453.10 and you didn’t want to buy the spike into $1613.00, then a pullback into the 50% to 61.8% zone will offer the next opportunity to get long if you so desire.