Gold Price Futures (GC) Technical Analysis – Rectangle, Triangle Chart Patterns Suggest Impending Volatility
Gold futures are trading higher late Thursday despite extremely low volume. Traders are saying the market is being underpinned by the lack of details over the U.S.-China trade deal, and the political uncertainty in Washington. The low volume is being attributed to position-squaring ahead of the Christmas and New Year holidays.
At 20:35 GMT, February Comex gold is trading $1483.20, up $4.50 or +0.31%.
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A drop in Treasury yields is also responsible for gold’s strength. Yields fell, making the U.S. Dollar a less-attractive investment, while driving up demand for dollar-denominated gold. Yields fell after the release of mixed U.S. economic data.
Weekly jobless claims fell to 234,000 from 252,000 the week before. However, economists were looking for a drop to 225,000. Meanwhile, the Philadelphia Federal Reserve’s business conditions index fell to 0.3 in December from 10.4 in the previous month. Economists expected the index to slip to 8. Existing Home Sales also disappointed, coming in at 5.35M, below the 5.44M forecast.
Daily Technical Analysis
The main trend is up according to the daily swing chart. 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. A new minor bottom was formed at $1474.30 earlier today.
The short-term range is $1453.10 to $1491.60. Its retracement zone at $1472.40 to $1467.80 is support.
The main range is $1525.20 to $1453.10. Its retracement zone at $1489.20 to $1497.70 is resistance.
Short-Term Outlook
The series of higher-bottoms and higher-tops are helping to give the February Comex gold market an upside bias, and the elongated rectangular pattern inside a triangle chart pattern are signs of impending volatility.
We’re not certain of a direction yet, but the price action suggests something big is building. However, the extremely low volume will make it difficult to post a successful breakout move at this time.