Gold Futures Price Technical Analysis (GC) – The Next Big Challenge For Bullish Traders Is $ 1,817.50
Gold futures edged higher on Thursday due to low volume ahead of the long Christmas holiday weekend. The precious metal was supported by a weaker US dollar and strong demand for riskier assets. The gains were probably capped by the good yields of the US Treasury.
On Thursday, the Comex’s gold futures for February stood at $ 1,811.70, up $ 9.50 or + 0.53%. The SPDR Gold Shares ETF (GLD) closed at $ 168.98, up $ 0.39 or + 0.23%.
Allowing fears about fallout from the Omicron coronavirus variant is encouraging investors to shed hedge positions in U.S. Treasuries and the U.S. dollar.
Selling Treasuries helps strengthen yields, which generally support a higher US dollar. But not at this time, as investors are liquidating the dollars they bought as safe haven protection from the potential economic damage of the rapidly spreading Omicron variant.
I don’t think we are seeing the start of a new bullish stage for gold, but rather an adjustment of positions in response to the movement of the dollar. Once the dollar hedges are lifted, the greenback should resume its rally, putting pressure on gold prices.
Technical analysis of the daily swing chart
The main trend is upward on the daily swing chart. A trade up to $ 1,815.70 will reaffirm the uptrend. A move to $ 1785.00 will change the main downward trend.
The minor range is $ 1,815.70 to $ 1,785.00. On Thursday, the market closed on the right side of its pivot at $ 1,800.40, making it a support.
The short-term range is $ 1,753.00 to $ 1,815.70. Its $ 1784.40 retracement area to $ 1777.00 is support.
Primary support is $ 1,781.00 to $ 1,757.10. When combined with the short-term retracement area, it forms two support clusters at $ 1784.40 – $ 1781.00 and $ 1781.00 – $ 1777.00.
Another short-term range is $ 1881.90 to $ 1753.00. His $ 1,817.50 retracement area to $ 1,832.70 is the next target on the upside. This area controls the short-term direction of the market.
Short term outlook
The near-term direction of the February ExCom gold futures market will likely be determined by the reaction of traders between $ 1,817.50 and $ 1,832.70.
The daily chart shows that lesser resistance will be on the upside if the buyers can clear $ 1,832.70 and maintain movement. There will be no resistance until the major high on November 16 at $ 1881.90.
A failure at $ 1,817.50 will indicate the presence of sellers. This could lead to a laborious breakout with potential targets a minor pivot at $ 1,800.40 and a major support cluster at $ 1,785.00 to $ 1,777.00.