Gold futures price technical analysis (GC) – Testing the resistance of the retracement zone at $ 1817.50
Gold futures are trading higher early Friday, continuing to rise after a strong performance in the previous session. The catalyst for the rally is falling Treasury yields. A firmer US dollar can limit gains. There are no major fundamental announcements, so the price action suggests that extremely low holiday volume could be behind the rally. Some analysts see the hedging pressure and support from Asian buyers.
“The year-end risk hedging pushed gold higher overnight and keeps gold supported in Asia, despite a modest recovery in the US dollar overnight,” said Jeffrey Halley, analyst senior market at OANDA.
As of 07:29 GMT, February Comex gold futures are trading at $ 1,820.90, up $ 6.80 or + 0.37%. The SPDR Gold Shares ETF (GLD) on Thursday came in at $ 169.79, up $ 1.20 or + 0.71%.
Benchmark 10-year US Treasury yields fell from one-month highs with no major catalysts to steer the market and many traders exited ahead of the New Years holiday, lowering the opportunity cost of holding bullion that does not earn interest.
Technical analysis of the daily swing chart
The main trend is upward on the daily swing chart. A trade at $ 1,821.60 will signal a resumption of the uptrend. A move to $ 1785.00 will change the main downward trend.
The minor scale is also on the rise. A trade up to $ 1,789.10 will change the minor downtrend. This will shift the momentum downward.
The main range is $ 1,881.90 to $ 1,753.00. The market is currently testing its retracement zone between $ 1,817.50 and $ 1,832.70. This area controls the short-term direction of the market.
The minor range is $ 1,785.00 to $ 1,821.60. Its 50% level at $ 1,803.30 is the closest support. This level will increase if buyers withdraw $ 1,821.60.
Additional support is a pair of 50% levels at $ 1787.30 and $ 1781.00.
Technical forecasts of the daily swing chart
The direction of the February Comex gold futures contract on Friday will likely be determined by the reaction of traders at $ 1,817.50.
A sustained movement of over $ 1,817.50 will indicate the presence of buyers. The first bullish target is $ 1,821.60. Removing this level will indicate that the buy is getting stronger. This could trigger a further rally in the main Fibonacci level at $ 1,832.70. This is the trigger for an upward acceleration.
A sustained move below $ 1,817.50 will signal the presence of sellers. If this move generates enough bearish momentum, look for a breakout at $ 1,803.30.
If the sale is strong enough to take out $ 1,803.30, look for the sale to potentially expand into the $ 1,789.10, $ 1,787.30, $ 1,785.00, and $ 1,781.00 price group. This area supports the market.