Gold Price Futures (GC) Technical Analysis – Rapidly Approaching Major Support Zone at $1781.00 – $1757.10

Gold futures are trading sharply lower late in the session on Thursday after hitting its worst level since December 21. The market is being pressured by a jump in Treasury yields after the Federal Reserve signaled a faster pace to its expected interest rate hikes in 2022.

At 21:22 GMT, February Comex gold futures are trading $1788.60, down $36.50 or -2.00%.  On Thursday, the SPDR Gold Shares ETF (GLD) settled at $167.03, down $2.03 or -1.20%.

The Fed minutes released on Wednesday showed officials had discussed shrinking the central bank’s overall asset holdings as well as raising rates sooner than expected to fight inflation.

Gold, a non-interest-paying asset, tends to fall out of favor among investors when interest rates increase. On Thursday, benchmark 10-year yields rose to their highest level since March last year.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $1785.00 will change the main trend to down. A move through $1833.00 will signal a resumption of the uptrend.

The short-term range is $1753.00 to $1833.00. Gold is currently trading on the weak side of its 50% level at $1793.00, making it resistance.

The next resistance is the minor 50% level at $1809.20.

The main range is $1881.90 to $1753.00. Its retracement zone at $1817.50 to $1832.70 stopped the buying earlier in the week at $1833.00. This zone is controlling the near-term direction of the market.

The major long-term support zone is $1781.00 to $1757.10. Buyers have been coming in on a test of this area since early December. A sustained move under $1757.10 could trigger the start of an acceleration to the downside.

Short-Term Outlook

The major short-term resistance is $1817.50 to $1832.70. Look for a bearish tone as long as February Comex gold prices remain below this area.

The next major challenge on the downside is $1781.00 to $1757.10. Buyers could continue to come in on a test of this area. They may even try to form a support base. However, if sellers can take out $1757.10 then sustain the move, we could see the start of a year-long downtrend.