Gold Price Futures (GC) Technical Analysis – Weakens Under $1933.20, Strengthens Over $1972.40

Gold futures nudged higher on Tuesday, helped by a combination of factors including a weaker U.S. Dollar, which increased foreign demand for the dollar-denominated asset, growing concerns about COVID-19, which raised concerns about the speed of the global economic recovery and the U.S. senate runoff elections in Georgia that could impact President Joe Biden’s agenda including an overhaul of the tax system, infrastructure spending and additional fiscal stimulus measures.

At 20:53 GMT, February Comex gold futures are trading $1953.20, up $6.60 or +0.34%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1973.30 will reaffirm the uptrend. The main trend will change to down on a move through $1820.00.

Due to the prolonged move up in terms of price and time, the market is inside the window of time for a closing price reversal top. The chart pattern won’t change the main trend to down, but it could alleviate some of the upside pressure by fueling a 2 to 3 day correction.

The minor trend is also up. A trade through $1859.00 will change the minor trend to down. This will shift momentum to the downside.

The short-term range is $2099.20 to $1767.20. Its 50% to 61.8% retracement zone is currently being tested. This zone is controlling the near-term direction of the market.

Short-Term Outlook

The direction of the February Comex gold market early Wednesday is likely to be determined by trader reaction to the 50% level at $1933.20.

Bullish Scenario

A sustained move over $1933.20 will indicate the presence of buyers. This could trigger a surge into the resistance cluster at $1972.40 to $1973.30. Overtaking this area could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under $1933.20 will signal the presence of sellers. This could trigger the start of a 50% retracement of the $1820.00 to $1957.00 range or the $1767.20 to $1957.00 range. This makes $1888.50 and $1862.10 potential downside targets.