Gold Price Futures (GC) Technical Analysis – Inside Move Suggests Investor Indecision Due to Dollar Swings

James Hyerczyk

Updated Wed, Dec 5, 2018, 12:43 AM

Gold futures are trading lower early Wednesday after hitting its highest level since October 26 during the previous session. The selling is being fueled by a stronger U.S. Dollar, which is helping to increase foreign demand for the dollar-denominated asset. The greenback is trimming some of its recent losses, but its gains could be capped later in the session if concerns over a Treasury yield inversion re-emerge. This could help underpin gold prices.

At 0716 GMT, February Comex gold is trading $1239.80, down $6.80 or -0.55%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1247.50 will signal a resumption of the uptrend. The main trend will change to down on a trade through $1216.80.

The minor trend is also up. A trade through $1221.80 will change the minor trend to down. This will also shift momentum to the downside.

On the downside, the first support cluster comes in at $1233.10 to $1232.20. The second support cluster is at $1228.50 to $1227.20. The daily chart opens up to the downside under $1227.20 with the next major target zone $1221.00 to $1213.70.

Daily Swing Chart Technical Forecast

Today’s inside move suggests investor indecision and impending volatility. There are no reference points for a breakout except for the previous day’s high and low.

Bullish Scenario

Taking out $1247.50 will signal a resumption of the uptrend. This is followed by the next main top at $1252.00. It’s going to take a weaker dollar to trigger a breakout over these levels.

Bearish Scenario

Look for gold prices to weaken if the U.S. Dollar continues to rise. Taking out yesterday’s low at $1235.80 will indicate the selling pressure is getting stronger. This will also make $1247.50 a new minor top.

The first target is the support cluster at $1233.10 to $1232.20. Since the main trend is up, look for buyers to show up on the first test of this area. Look for the selling pressure to increase if $1232.20 fails as support with the next target zone coming in at $1228.50 to $1227.20.

This article was originally posted on FX Empire