Gold futures technical analysis – January 17, 2025

Introduction

Gold futures (GC) are trading at $2,730.7, consolidating near the upper boundary of a symmetrical triangle pattern. Despite briefly testing the breakout zone, the move lacks strong follow-through, leaving the potential for a retracement back toward the triangle’s support line. Both bullish and bearish scenarios remain in play, and traders should monitor critical levels closely.

Technical analysis overview

Symmetrical Triangle Pattern:

• Gold remains within a well-defined symmetrical triangle that has been forming since October 2024. The price is currently testing the upper boundary, but a decisive breakout has yet to occur.

Support and Resistance Levels

Resistance Levels:

1. $2,750: The upper boundary of the triangle, currently acting as resistance. A close above this level would signal a breakout and open the path to higher targets.
2. $2,800: A key psychological level and the first upside target following a breakout.
3. $2,850 – $2,900: A measured move from the triangle’s height projects this range as the ultimate target.

Support Levels:

1. $2,700: Immediate support, aligning with recent consolidation and acting as the lower threshold of the current trading range.
2. $2,661 (50-day SMA): A key dynamic support level within the triangle.
3. $2,657 (100-day SMA): A longer-term support level coinciding with the lower boundary of the triangle.

Scenarios to Watch

Bullish Case:

• A daily close above $2,750 would confirm a breakout from the symmetrical triangle and target the $2,800 – $2,850 range in the near term. Volume and follow-through will be critical for confirmation.

Bearish Case:

• A rejection at the upper boundary of the triangle and a move below $2,700 would likely lead to a retest of the lower boundary near $2,660.
• A breakdown below the lower boundary would invalidate the pattern and expose downside targets at $2,600 – $2,550.

Trade Ideas

Bullish Setup:

• Entry: Long positions on a confirmed breakout above $2,750.
• Targets:
  • First target: $2,800.
  • Second target: $2,850.
• Stop-Loss: Below $2,720 to manage risk.

Bearish Setup:

• Entry: Short positions on a rejection near $2,750, targeting a retracement.
• Targets:
  • First target: $2,700.
  • Second target: $2,660 (50-day SMA).
• Stop-Loss: Above $2,775 to minimize risk.