Gold Price Futures (GC) Technical Analysis – Weekly Pivot at $1286.80

December Comex Gold futures closed lower for the third consecutive week. The market was primarily pressured by rising U.S. Treasury yields, a stronger U.S. Dollar and increased demand for higher risk assets. The catalyst behind these moves was hawking comments from Fed Chair Janet Yellen and higher expectations for a third rate hike before the end of the year.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart, however, momentum has shifted to the downside.

The market is currently trading inside a major retracement zone bounded by $1267.90 to $1298.10.

The main range is $1211.10 to $1362.40. Its retracement zone at $1286.80 to $1268.90 falls inside the major retracement zone.

Combining the two retracement zones makes $1268.90 to $1267.90 the best downside target and potential support cluster.

Weekly Forecast

Based on last week’s close at $1284.80 and the price action, the direction of the gold market this week is likely to be determined by trader reaction to the main 50% level at $1286.80.

A sustained move under $1286.80 will indicate the presence of sellers. This could generate the downside momentum needed to challenge the major 50% level at $1267.90. We could see a technical bounce on the first test of this level, but if it fails then look for the selling to extend into the next uptrending angle at $1259.10.

A sustained move over $1286.80 will signal the presence of buyers. The rally is likely to be labored because of potential resistance at $1298.10, $1298.40 and $1307.10.

Overtaking $1307.10 could trigger an acceleration to the upside with the next target angle coming in at $1330.40.

We could see some chop this week, but looking at the bigger picture, we’re bearish under $1286.80 and bullish over $1307.10.