Gold Price Futures (GC) Technical Analysis – Weekly Trend Determined by $1335.00 Gann Angle

December Comex Gold futures gapped higher early Monday as investors reacted to North Korea’s nuclear weapons test over the week-end. Investors repeated the flight-to-safety drill on the news: they bought gold, the Japanese Yen and U.S. Treasurys and sold the U.S. Dollar and equities. It was a typical safe-haven play.

Monday is a U.S. bank holiday so we’ll take a look at the weekly chart. This analysis should be good for the week.

Weekly Technical Analysis

The main trend is up according to the weekly chart. If the upside momentum continues, the rally may take us to $1392.60 and $1396.00.

The main range is $1396.00 to $1139.70. Its retracement zone at $1298.10 to $1267.90 is support. Holding above this zone is also contributing to the strong upside bias.

Forecast

Based on Friday’s close at $1330.40, the direction of the gold market this week is likely to be determined by trader reaction to the long-term downtrending angle at $1335.00.

A sustained move over $1335.00 will indicate the presence of buyers. This could create enough upside momentum to trigger a further rally into the next long-term downtrending angle at $1365.50. This is the last potential resistance angle before the $1392.60 and $1396.00 main tops.

A sustained move under $1335.00 will signal the presence of sellers. The daily chart is open to the downside so if sellers come in with big volume, we could see a pullback to the Fibonacci level at $1298.10.

Gold is likely to continue to be underpinned by geopolitical events this week, however, the upside will be determined by how the U.S. Dollar reacts to the Reserve Bank of Australia’s and the European Central Bank’s interest rate decisions. Investor sentiment will also dictate the tone in the market. Stronger stocks will also limit the upside.