Gold Price Futures (GC) Technical Analysis – Strengthens Over $1228.40, Weakens Under $1227.00

February Comex Gold futures finished lower on Friday, completing a mostly sideways trade that ended with a lower close on the weekly chart. The market was primarily supported by a dovish outlook for interest rates, but gains were capped by a stronger U.S. Dollar. Safe-haven buying continued to support the dollar, which led to lower foreign demand for dollar-denominated gold futures.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower especially with the formation of the secondary lower top at $1236.70.

A trade through $1236.70 will shift momentum back to the upside. A move through $1216.80 will change the main trend to down.

Daily Technical Forecast

Based on the close at $1226.00, the direction of the February Comex Gold futures contract on Monday is likely to be determined by trader reaction to a pair of Gann angles at $1228.40 and 1227.00.

Bullish Scenario

A sustained move over $1228.40 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to extend into the minor top at $1234.90, followed by the main top at $1236.70.

The next Gann angle target is $1239.50. Sellers could come in on the first test of this downtrending Gann angle. It is also the trigger point for an acceleration into the next downtrending Gann angle at $1245.80. This is the last potential resistance angle before the $1252.00 main top.

Bearish Scenario

A sustained move under $1227.00 will signal the presence of sellers. This could trigger a steep break since the next target is the minor bottom at $1216.80. Taking out this bottom should trigger a further break into the next uptrending Gann angle at $1215.40.

We could see a technical bounce on the first test of $1215.40. However, if it fails then look for the selling to extend into the next uptrending Gann angle at $1208.90. This is the last potential support angle before the $1202.40 main bottom.

Basically, we’re looking for a bullish tone to develop on a sustained move over $1228.40, and for a bearish tone to develop on a sustained move under $1227.00.