Gold Price Futures (GC) Technical Analysis – Trying to Build Support Base; Must Hold $1267.90

December Comex Gold futures finished $5.00 higher last week. The gain should’ve been larger, but a sloppy trade late Friday due to thin market conditions drove prices lower into the close.

The market was primarily supported last week by a drop in U.S. Treasury yields, a lower U.S. Dollar a diminishing appetite for higher risk assets.

The catalyst behind these moves were concerns over a delay in U.S. tax reform. With the market pricing in an interest rate hike in December, a delay in the Republican tax plan may mean the Fed will have to alter the timing and number of future rate hikes in 2018 and 2019. This is potentially bearish for the dollar and bullish for gold prices.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart, however, momentum is clearly to the downside. A trade through $1262.80 will change the main trend to down. The next bottom comes in at $1211.10.

The uptrend will resume on a trade through $1308.40. The next upside target over this level is the main top at $1362.40.

The major range is $1139.70 to $1396.00. Since early October, its retracement zone at $1267.90 to $1298.10 has been providing support.

The main range is $1211.10 to $1362.40. Its 50% level or pivot is $1286.80. Trading below this level is giving the market a downside bias.

Weekly Technical Forecast

Based on last week’s close at $1274.20 and the weekly price action, the direction of the gold market this week is likely to be determined by trader reaction to the major 50% level at $1267.90.

A sustained move over $1267.90 will signal the presence of buyers. This could lead to a labored rally with a series of levels at $1282.40, $1283.10, $1286.80 and $1298.10 providing layers of resistance.

Crossing to the strong side of $1298.10 will indicate the buying is getting stronger. This could trigger a really into the main top at $1308.40. This is the trigger point for an acceleration to the upside.

A failure to hold $1267.90 will indicate the presence of sellers. This could lead to a quick test of $1263.80 and $1262.80.

Look for an acceleration to the downside if $1262.80 is taken out with conviction. This could trigger a sharp break into the next uptrending angle at $1247.10.