Gold Price Futures (GC) Technical Analysis – Weekly Chart Strengthens Over $1220.10, Weakens Under $1207.00

December Comex Gold futures traded firm for much of the week, but couldn’t take out any significant highs before sellers took over. Not only did the market close lower for the week, but it also produced one of the worst monthly performances in recent memory. Once again, it was expectations of higher interest rates and safe-haven buying of the U.S. Dollar that pressured gold prices.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. The market is in no position to change the main trend to up on the weekly chart. However, there is room for a short-covering rally and a test of a key retracement zone at $1250.60 to $1277.70. This zone may be controlling the near-term direction of the market.

A trade through $1162.00 will signal a resumption of the downtrend. Even if this level is taken out, buyers should watch for a potentially bullish closing price reversal bottom due to the prolonged move down in terms of price and time.

Weekly Technical Forecast

Based on last week’s close at $1206.90, the direction of the December Comex Gold market this week is likely to be determined by trader reaction to a steep downtrending Gann angle at 1220.10 and a nearly flat uptrending Gann angle at $1207.00.

Taking out the downtrending Gann angle at $1220.10 will indicate the presence of buyers. This could develop into a significant breakout because this Gann angle, moving down at a rate of $8.00 per week from the $1388.10 main top the week-ending April 13, is a potential trigger point for an acceleration to the upside with the first target a Fibonacci level at $1250.60.

If the rally can extend beyond $1250.60 then the 50% level at $1277.70 will become the next upside target.

A sustained move under $1220.10 will signal the presence of sellers. Taking out the Gann angle at $1207.00 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with the next potential target angle coming in at $1184.50.

The Gann angle at $1184.50 is the last potential support angle before the $1167.10 low and the December 16, 2016 main bottom at $1162.00.

Basically, look for an upside bias to develop on a sustained move over $1220.10 and for the downside bias to resume on a sustained move under $1207.00.