Gold futures are inching higher early Thursday after posting a slightly higher close the previous session. The price action on Wednesday was impressive with buyers coming in strong following intraday weakness early in the session.
Traders shrugged off the strong U.S. Dollar, but tracked the movement in U.S. Treasury yields very closely. We’re expecting to see a similar pattern on Thursday and Friday, following the release of the U.S. Non-Farm Payrolls report.
At 12:53 on Thursday, December Comex gold is trading $1763.90, up $2.10 or +0.12%.
On Wednesday, the yield on 10-year U.S. Treasuries pulled back after hitting a more than three-month high, but remained above 1.5%. This was enough to trigger an intraday short-covering rally in gold. However, a stronger dollar put a lid on gains.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1771.50 will change the main trend to up. A move through $1721.10 will signal a resumption of the downtrend.
Based on the close at $1761.80, support comes in at $1757.40, $1746.30 and $1738.60. The latter is a potential trigger point for a drop into $1716.00.
On the upside, potential resistance is $1765.90, $1779.00, $1795.00 and $1800.00.
Daily Swing Chart Technical Forecast
The direction of the December Comex gold market early Thursday is likely to be determined by trader reaction to $1765.90.
A sustained move under $1765.90 will indicate the presence of sellers. This could trigger a quick break into $1757.40.
Taking out $1757.40 will indicate the selling is getting stronger with potential downside targets $1746.30 and $1738.60.
The daily chart starts to open up to the downside under $1738.60 with potential targets a main bottom at $1721.10 and a major Fibonacci level at $1716.00.
A sustained move over $1765.90 will signal the presence of buyers. The first target is the main top at $1771.50. Taking out this price will change the main trend to up with $1779.00 the next likely target.
The market starts to open up to the upside over $1779.00 with potential targets the main top at $1788.40, followed by a pair of $1795.00 and $1800.00.
There are plenty of potential breakout areas in either direction on the daily chart, but the light volume is a challenge for traders who like to buy strength and sell weakness. Be careful chasing prices.