Technical Analysis

Bullish Sentiment Remains High In Gold Futures (GC)

  • Analysis of Gold Futures (GC) price action, highlighting key resistance and support levels.
  • Examination of recent Gold price recovery and implications for market sentiment.
  • Overview of potential future price movements and strategy considerations for Gold Futures.

Last week, we analyzed the price action in Gold and maintained a bullish stance on the yellow metal. As we look at the updated price discovery, nothing has changed with GC now moving into a price level to test an important resistance level at $2019.

The Gold chart shows a significant recovery from a support zone established around the $1831 mark, resembling what is close to a V reversal pattern. The rebound from this level was sharp, suggesting that the market sentiment remains firmly in favor of the bulls as geopolitical tensions remain high. Notably, the price has pushed past the $1930 resistance, which previously acted as a consolidation area. This zone turned into support, and the price rallied out of it, the day after it tested the level.

It seems likely that this level will break but in the case that the bears are too strong and we see a red close this week, price could likely move into a consolidation phase and move in between the $1930 and $2019 levels.

Key takeaways from the updated chart analysis include:

  1. The confirmation of the $1831 level as a strong support zone.
  2. Price holding above $1930 indicates a shift in the market structure from consolidation to a possible new leg of the uptrend.
  3. The current test of the $2019.17 level is critical; a weekly close above could send Gold to all-time highs shortly thereafter.
  4. Volume and price action around these key levels should be monitored closely for signs of strength or weakness.
  5. We should consider the implications of macroeconomic factors and market sentiment, which could influence gold prices.

Gold remains bullish in the short, medium, and long term. The only thing that bulls should be wary of is the resistance level that is currently being tested. This is not a sign to take shorts or even reduce long positions but it might be the best play at the moment to just sit it out and wait to see how price reacts at this level before adding to a long position.