Gold Price Futures (GC) Technical Analysis – Weekly Chart Strengthens Over $1206.00, Weakens Under $1184.00

Gold futures plunged last week to their lowest level since December 2016, driven by a surge in the U.S. Dollar to its highest level since the week-ending May 19, 2017. Buyers came in as the market approached a main bottom at $1162.00. The move triggered a short-covering rally on the daily chart, but it wasn’t enough to reverse the weekly trend.

Last week, December Comex Gold settled at $1184.20, down $34.80 or -2.85%.

The price action is being primarily dictated by the movement in the U.S. Dollar. A weaker dollar is likely to lead to more short-covering, but not enough to change the main trend to up. Any short-covering rally will be designed to alleviate some of the excessive selling pressure.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through $1162.00 will signal a resumption of the downtrend. This is the December 16, 2016 main bottom.

The main range is $1162.00 to $1392.30. Its retracement zone at $1250.60 to $1277.70 is resistance. This zone is also controlling the longer-term direction of the market.

Weekly Technical Forecast

A sustained move over $1184.00 will indicate the presence of buyers. If this move can attract enough buyers, we could see a rally into the next uptrending Gann angle at $1206.00. Overtaking this angle will indicate the short-covering is getting stronger. This could trigger a spike into the steep downtrending Gann angle at $1236.10.

The downtrending Gann angle, moving at a rate of $8.00 per week from the $1388.10 main top, has been guiding gold prices lower since the week-ending April 13 or 19 weeks. Overtaking this angle will shift momentum to the upside.

A sustained move under $1184.00 will signal the presence of sellers. This could lead to a test of last week’s low at $1167.10 then the December 16, 2016 main bottom at $1162.00.