Gold (GC) Futures Technical Analysis – January 23, 2014 Forecast …
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A sharp drop in the U.S. Dollar overnight helped February Gold futures reverse earlier weakness, putting the market in a position to post a solid gain today. Conditions looked bleak shortly after the opening when gold took out the last swing bottom at $1233.50, turning the main trend to down on the daily chart. The move was thwarted when the dollar turned down, forcing gold short sellers to aggressively cover their positions.
Gold has been trading in a tight, two-sided market lately as investors try to figure out the direction of the dollar and the stock market. The rise in the dollar hasn’t exerted as much of an influence on the direction of gold as the movement in the stock market has. In my opinion, gold is holding up near the top of its range for the year because bullish investors are anticipating a sell-off in the stock market. The hedge buying appears to be strong at this time since stocks haven’t been able to reassert the bullishness we saw last year.
Daily February Gold
Technically, the main trend is down on the daily chart. It turned down last night when $1233.50 was violated. The objective of the sell-off was the major retracement zone at $1221.70 to $1212.19. This zone could still be tested if the dollar strengthens after the release of today’s economic reports.
A new short-term range may be developing between $1262.00 and $1230.80. How traders react to the pivot price at $1246.40 will determine the tone of the market the rest of the day. Crossing this pivot with conviction will also put gold on the strong side of an uptrending angle at $1245.40. Gold is also trading on the strong side of a major downtrending angle at $1242.30.
There are many technical factors giving gold an upside bias today, but the major catalyst for a continuation of today’s early reversal will be the U.S. economic reports and whether Euro and British Pound investors refrain from taking profits into the close. In addition, a sell-off in U.S. equity markets will also drive gold higher as more investors buy the metal for protection. The indices are already trading lower because of weak manufacturing data from China.
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Gold (GC) Futures Technical Analysis – January 23, 2014 Forecast …
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