Gold Price Futures (GC) Technical Analysis – Lower Unless Buyers Can Take Out $1229.10 to Confirm Reversal Bottom
Gold futures are trading lower early Thursday. A recovery in the U.S. Dollar is helping to pressure prices. The inability to follow-through to the upside after yesterday’s technical closing price reversal bottom is also weighing on prices.
At 0624 GMT, August Comex gold futures are trading $1222.20, down $5.70 or -0.46%.
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Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, yesterday’s potentially bullish closing price reversal bottom may be signaling a shift in momentum to up. A trade through $1229.10 will confirm the chart pattern. This could trigger the start of a 2 to 3 day counter-trend rally with the first objective $1243.90 to $1249.30.
The main trend will change to up on a move through $1266.90. A move through $1220.90 will negate the closing price reversal bottom chart pattern and signal a resumption of the downtrend.
The short-term range is $1266.90 to $1220.90. If a short-covering rally can gain traction over $1229.10 then its 50% to 61.8% retracement zone at $1243.90 to $1249.30 will become the primary upside objective. Since the main trend is down, sellers are likely to show up on a test of this zone.
Daily Swing Chart Technical Forecast
Based on yesterday’s chart pattern and today’s early trade, the direction of the August Comex Gold futures contract today is likely to be determined by trader reaction to yesterday’s high at $1229.10.
A sustained move under $1229.10 will indicate the presence of sellers. This could lead to a retest of yesterday’s low at $1220.90, followed by the January 27, 2017 main bottom at $1217.20. A break through this level could lead to an eventual test of the psychological $1200.00 level.
A sustained move over $1229.10 will confirm the reversal bottom and signal the presence of counter-trend buyers. Overtaking the former top at $1230.70 will indicate the buying is getting stronger. If it generates enough upside momentum then look for the rally to extend over the near-term into $1243.90 to $1249.30.
Although $1200.00 may be a psychological target, the true downside target is the December 15, 2016 main bottom at $1158.40.