Gold Price Futures (GC) Technical Analysis – Trade Through $1534.80 Confirms Closing Price Reversal Top

Gold futures are edging lower near the extended session close on Wednesday. For a second session, the market traded inside Monday’s wide range. It’s only two days, but recently the market traded inside the wide range from August 13 for eight trading sessions.

After the initial rally this month from $1412.10 on August 1 to $1546.10 on August 13, the market has looked a little stagnant despite rallying to $1565.00 earlier this week. The price action also suggests the last two major spike moves to the upside were fueled by buy stops rather than aggressive buying. This may be an early indication that the major players may be more interested in buying breaks into value zones rather than chasing the market at six-year highs.

At 19:08 GMT, December Comex gold futures are trading $1551.30, down $0.50 or -0.03%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the downside after posting a potentially bearish closing price reversal top on August 26.

A trade through $1565.00 will negate the closing price reversal top and signal a resumption of the uptrend.

A move through $1534.80 will confirm the closing price reversal top. It will also signal a shift in momentum to the downside. This could trigger the start of a 2 to 3 day correction.

Although there could be a sizable correction, it would indicate a change in trend, probably just a pullback into a value area. The main trend will change to down on a trade through $1412.10.

The minor trend is up. A trade through $1488.90 will change the minor trend to down. This will also indicate a change in momentum.

The minor range is $1488.90 to $1565.00. Its 50% level or pivot at $1527.00 is the first downside target.

The main range is $1412.10 to $1565.00. Its retracement zone at $1488.60 to $1470.50 is the value zone.

Daily Swing Chart Technical Forecast

Based on the price action the last three sessions and the current price at $1551.30, the direction of the December Comex gold futures contract into the close is likely to be determined by trader reaction to the pivot at $1534.80.

Bullish Scenario

A sustained move over $1534.80 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to make a run at $1565.00. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

Taking out $1534.80 will confirm the closing price reversal top. This move could trigger a break into the minor pivot at $1527.00. This is a potential trigger point for an acceleration to the downside with the next major targets the minor bottom at $1488.90 and the main 50% level at $1488.60.