Gold Price Futures (GC) Technical Analysis – Strengthens Over $1289.20, Weakens Under $1285.70
Gold is trading lower at the mid-session on Tuesday, but remains inside its January 4 range. Putting a lid on the market is the stronger U.S. Dollar and increased appetite for risk. Supporting the market is the dovish Federal Reserve and fear of a global economic slowdown. Last week, the Fed suggested it would pause future rate hikes until the financial market volatility calmed and the global economy improved.
At 1717 GMT, February Comex Gold is trading $1288.40, down $2.90 or -0.22%.
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Daily Technical Analysis
The main trend is up according to the daily swing chart. However, upside momentum has slowed considerably since the formation of the closing price reversal top on January 4.
A trade through $1300.40 will negate the closing price reversal top and signal a resumption of the uptrend with the next major target coming in at $1312.30. A move through $1278.10 will confirm the closing price reversal top. This could trigger a sharp break to at least $1268.50.
The market is currently trading inside a major retracement zone bounded by $1285.70 to $1312.30.
The extremely short-term range is $1300.40 to $1278.10. Its 50% level or pivot is at $1289.20.
The market seems to be trying to establish a support base between $1285.70 and $1289.20.
Daily Technical Forecast
Based on the early price action, the direction of the February Comex Gold market into the close is likely to be determined by trader reaction to the short-term pivot at $1289.20 and the major 50% level at $1285.70.
Bullish Scenario
Overtaking and sustaining a move over $1289.20 will indicate the presence of buyers. If this generates enough upside momentum then we could see an eventual retest of $1300.40. Taking out this level could trigger an acceleration into the major Fibonacci level at $1312.30.
Bearish Scenario
A sustained move under $1289.20 will signal the presence of sellers. The trigger point for an acceleration to the downside is the major 50% level at $1285.70. If sellers can take out this level with strong volume then we could see an acceleration into $1278.10 and an uptrending Gann angle at $1276.50.