Gold Price Futures (GC) Technical Analysis – Weekly Chart Strengthens Over $1206.60, Weakens Under $1197.20

Gold futures have been under pressure this week with prices driven lower by a stronger U.S. Dollar. The dollar has benefited since November 7 when the U.S. Federal Reserve raised expectations for further U.S. interest rate hikes. Concerns over Italy’s budget and ongoing Brexit talks also weighed on prices. Technically, the market is retracing its August to October rally so the break has been pretty ordinary.

On Tuesday, the December Comex Gold futures contract settled at $1201.40, down $2.10 or -0.17%. As of yesterday’s close, the market is down $7.20 or -0.60% for the week.

Buyers could come in because the retracement zone being tested represents value. However, the dollar is going to have to weaken in order to generate a meaningful rally. Positive developments over Italy’s budget and Brexit could be the catalysts that drive the greenback lower and dollar-denominated gold higher.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. Due to the number of net shorts in the market, all the August to October rally accomplished was drive the shorts out of the market. Now, buyers are going to try to form a secondary higher bottom. This could shift sentiment back to the upside.

The main trend changes to up on a trade through $1246.00. A trade through $1167.10 will signal a resumption of the downtrend.

The main range is $1167.10 to $1246.00. Its retracement zone at $1206.60 to $1197.20 is controlling the near-term direction of the market.

Weekly Technical Forecast

The direction of the December Comex Gold market the rest of the week will be determined by trader reaction to the 50% level at $1206.60 and the 61.8% level at $1197.20.

Bullish Scenario

A sustained move over $1206.60 will indicate the presence of buyers. If this move generates enough upside momentum then look for a potential spike into a pair of Gann angles at $1219.10 to $1222.00.

Since the main trend is down, look for sellers on the first test of $1219.10 to $1222.00. Overtaking $1222.00 could generate the upside momentum needed to challenge the next downtrending Gann angle at $1234.00.

Bearish Scenario

A sustained move under $1197.20 will signal the presence of sellers. This could lead to a quick test of an uptrending Gann angle at $1193.10.

Look for an acceleration to the downside if $1193.10 with the next target angle coming in at $1180.10. This is the last potential support angle before the $1167.10 main bottom.