Gold Price Futures (GC) Technical Analysis –Trade Through $1851.00 Confirms Closing Price Reversal Top

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Gold futures are trading nearly flat early Wednesday after posting a dramatic closing price reversal top the previous session. The chart pattern doesn’t change the trend to down, but if confirmed, it could trigger the start of a minimum 2 to 3 day correction.

The market reversed direction on Tuesday after a more than five-month high as upbeat U.S. retail sales data for October strengthened the greenback, making the dollar-denominated asset more expensive for foreign investors.

At 04:07 GMT, December Comex gold futures are trading $1855.40, up $1.30 or +0.07%.

Retail sales in the United States accelerated more than expected last month, giving the economy a lift at the start of the fourth quarter and sending the dollar to a 16-month high.

Daily December Comex Gold

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.

A trade through $1879.50 will negate the closing price reversal top and signal the resumption of the uptrend. A trade through $1851.00 will confirm the potentially bearish closing price reversal top and shift momentum to the downside.

On the upside, resistance is a pair of main tops at $1919.10 and $1922.00.

On the downside, potential support is a former main top at $1839.00, a Fibonacci level at $1828.80 and a short-term 50% level at $1819.00.

The major support is a pair of 50% levels at $1800.00 and $1795.00.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures contract on Wednesday is likely to be determined by trader reaction to $1865.30.

Bullish Scenario

A sustained move over $1865.30 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of $1879.50.

Taking out $1879.50 will indicate the buying is getting stronger. This could trigger an acceleration into $1919.00 to $1922.00 if the buying volume is strong enough.

Bearish Scenario

A sustained move under $1865.30 will signal the presence of sellers. Taking out $1851.00 will confirm the closing price reversal top and could drive the market into a series of downside targets at $1839.00, $1828.80 and $1819.00.

Since the main trend is up, buyers could come in on a test of any of these levels, but if $1819.00 fails then look for the selling to possibly extend into $1800.00 to $1795.00.