Gold futures were down on Friday as a stronger U.S. Dollar, firmer yields and equity markets dampened the non-yielding, dollar-denominated asset’s appeal as an investment. The precious metal also closed lower for the week after nearly touching last month’s high early in the week.
On Friday, December Comex gold settled at $1805.90, down $3.30 or -0.18%.
Heaping pressure on the metal was a stronger dollar index that held close to a 3-1/2 month peak and firmer benchmark Treasury yields. Higher yields tend to weigh on gold, which pays no interest as it translates into an increased opportunity cost of holding the metal.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1754.50 will signal a resumption of the downtrend. Taking out $1839.00 will change the main trend to up.
The minor trend is also down. A trade through $1814.50 will change the minor trend to up. This will shift momentum to the upside.
On the downside, the first support is the long-term 50% level at $1795.00. This is followed by a minor Fibonacci level at $1786.80. This is a potential trigger point for an acceleration to the downside.
On the upside, the first resistance is the 50% level at $1816.10. Taking out this level could trigger a surge into the short-term retracement zone at $1838.30 to $1858.00.
Daily Swing Chart Technical Forecast
Friday’s price action suggests a rangebound trade with a slight bias to the downside. Therefore, look for an upside bias to possibly develop on a sustained move over $1816.10, or for the downside bias to extend under $1795.00.
A sustained move under $1795.00 will indicate the presence of sellers. This could trigger a quick break into $1786.80. Taking out this level with heavy volume could trigger an acceleration to the downside with the main bottom at $1754.50 the next likely target.
A sustained move over $1816.10 will signal the presence of buyers. If strong buying accompanies this move then look for the buying to possibly extend into the resistance cluster at $1838.30 to $1839.00. Since the main trend is down, sellers are likely to come in on the first test of this level.
Taking out $1839.00 will change the main trend to up and could trigger an acceleration into $1858.00.