Gold Futures Price Technical Analysis (GC) – Main trend upward, but momentum drops below $ 1,851.00
Gold futures are edged higher on Friday after rebounding from earlier weakness. Bilateral price action suggests that bullish traders are banking on widening inflation risks and a slowing Federal Reserve. While bearish traders are betting on a faster Fed cut and interest rate hike sooner than expected.
At 10:10 a.m. GMT, December’s Comex gold futures are trading at $ 1,865.90, up $ 4.50 or + 0.24%.
High inflation may provide support, but policy expectations from the Fed and other major central banks amid strong resumption of economic growth should continue to create headwinds. In addition, gold should remain particularly sensitive to US economic data.
Technical analysis of the daily swing chart
The main trend is upward on the daily swing chart. However, momentum could be preparing to tip lower, after the potentially bearish top of the closing price reversal was formed on Tuesday.
A trade up to $ 1879.50 will cancel the reversal top of the closing price and signal a resumption of the uptrend. A move up to $ 1851.00 will confirm the chart pattern. This could trigger the start of a minimum 2-3 day correction.
The minor range is $ 1,879.50 to $ 1,851.00. The market is currently testing its 50% or pivot level at $ 1,865.30.
On the upside, potential resistance is a pair of major highs at $ 1919.00 – $ 1922.00.
On the downside, potential support levels line up at $ 1,839.00, $ 1,828.80 and $ 1,819.00.
Technical forecasts of the daily swing chart
The direction of the December Comex gold futures contract early Friday will likely be determined by the reaction of traders at $ 1,865.30.
A sustained move below $ 1,865.30 will indicate the presence of sellers. If this move creates enough downside momentum, then expect the sell to eventually expand to $ 1,851.00.
Withdrawing $ 1,851.00 will indicate that selling pressure is building. This could trigger a further breakout at $ 1,839.00, followed by $ 1,828.80 and $ 1,819.00. Since the main trend is up, buyers are looking for the breakout with $ 1,828.80 to $ 1,819.00 the best value area.
A sustained move above $ 1,865.30 will signal the presence of buyers. If this move generates enough bullish momentum, look for a move up to $ 1,979.50. This is a potential trigger point for an acceleration from $ 1919.10 to $ 1922.00.
Notes to the appendix
Gold buyers essentially need to decide if the fundamentals are strong enough to buy strength or to play for a return to support.