Gold Price Futures (GC) Technical Analysis – Low Volume Stifling Price Behavior
Gold futures finished lower on Wednesday, pressured by a stronger U.S. Dollar which found support from mounting expectations the U.S. Federal Reserve will not cut interest rates soon.
The strength of the dollar this week is also weighing on gold prices along with the fact that the U.S.-China trade deal has removed the necessity to place funds into so-called “safe-haven” gold. However, there is still a little buying interest being generated by renewed concerns over a hard Brexit and the fact that the Phase One trade deal is not fully completed yet.
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On Wednesday, February Comex gold futures settled at $1478.70, down $1.90 or -0.13%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, the upside momentum has slowed. A trade through $1491.60 will signal a resumption of the uptrend. The main trend will change to down on a trade through $1463.00.
The minor trend is also up. The minor bottom is $1465.50. The new minor top is $1484.90.
The nearest resistance is a pair of 50% levels at $1489.10 and $1495.30.
The nearest support is a series of retracement levels at $1477.30, $1472.30 and $1467.80.
Daily Swing Chart Technical Forecast
Based on Wednesday’s price action, the direction of the February Comex gold futures contract on Wednesday is likely to be determined by trader reaction to the Fibonacci level at $1477.30.
Bullish Scenario
A sustained move over $1477.30 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a possible rally into $1484.90, followed closely by $1489.10.
Additional resistance is $1491.60 and $1495.30. The latter is the trigger point for an acceleration to the upside with $1512.40 the next major upside target.
Bearish Scenario
A sustained move under $1477.30 will signal the presence of sellers. This could lead to a labored break with potential support levels at $1472.30 and $1467.80.
A minor bottom follows at $1465.50. Three main bottoms come in at $1463.00, $1456.60 and $1453.10.
Side Notes
Volume is below average now, and could drop even further during Christmas and New Year week. Thin conditions could lead to whip-saw price action.