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Gold Price Futures (GC) Technical Analysis – Reaction to $1781.00 to $1757.10 Determines Near-Term Direction

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  • GC=F
  • ZG=F

Gold futures are under pressure early Thursday, weighed down by firmer U.S. Treasury yields and U.S. Dollar. The catalysts behind the selling are hawkish comments from U.S. Federal Reserve Chairman Jerome Powell, who indicated policymakers could quicken the pace of tapering in an attempt to put a lid on surging inflation.

At 08:50 GMT, February Comex gold futures are trading $1770.20, down $14.10 or -0.79%.

Meanwhile, traders continue to monitor the new Omicron coronavirus variant while assessing its potential impact on the global economy. However, there just doesn’t seem to be enough information available to make a sound decision. The biggest concern is it may render the current COVID-19 vaccines ineffective.

Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the confirmation of the closing price reversal top on November 16.

A trade through $1761.00 will change the main trend to down. A move through $1881.90 will signal a resumption of the uptrend. This is highly unlikely, however, since the market is down 11 sessions from its last main top, it is inside the window of time for a closing price reversal bottom.

The minor trend is down. This confirms the shift in momentum.

The main range is $1680.00 to $1881.90. The market is currently testing its retracement zone at $1781.00 to $1757.10. This zone is controlling the near-term direction of the market.

The short-term range is $1881.90 to $1767.80. Its 50% level at $1824.90 is the primary upside target. This zone will move down as the market moves lower.

Daily Swing Chart Technical Forecast

The direction of the February Comex gold futures contract on Thursday is likely to be determined by trader reaction to $1781.00.

Bearish Scenario

A sustained move under $1781.00 will indicate the presence of sellers. This could lead to a test of the main bottom at $1761.00, followed closely by the Fibonacci level at $1757.10.

Taking out $1757.10 could trigger an acceleration to the downside with the next target the main bottom at $1723.70.

Bullish Scenario

A sustained move over $1781.00 will signal the presence of buyers. If this move is able to generate the upside momentum then look for a possible near-term rally into the pivot at $1824.90.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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