Nearby Gold Monthly Technical Analysis for December 2015

Nearby Comex Gold futures finished November at its lowest level since September 2009. The market was pressured by a surging U.S. Dollar, which was being underpinned by expectations of an interest rate hike by the Fed in December.

Based on the weak close, gold prices could fall throughout December into the Fed interest rate announcement date on December 16. There may be a technical bounce after the announcement because of the “sell the rumor, buy the fact” scenario.

Additionally, investors will be watching the language in the Fed statement for guidance pertaining to the timing of future rate hikes. There could be a short-covering rally about mid-month if the Fed is dovish on how it plans to make additional rate hikes.

Technically, the main trend is down according to the monthly swing chart. The main trend will remain down until the last swing top at $1311.00 is taken out with conviction.

Last month’s close put Gold on the weak side of a long-term uptrending angle. This angle, moving up $4.00 per month from the October 2008 main bottom at $739.80, comes in at $1083.80. Trader reaction to this angle will likely determine the direction of the market this month.

A sustained move over $1083.80 will indicate the presence of buyers. This may create enough upside momentum to challenge the first resistance angle at $1140.50. The next resistance comes in at $1204.30.

A sustained move under $1083.80 will signal the presence of sellers. The daily chart is wide open to the downside with the next potential target another uptrending angle at $911.80.

Watch the price action and read the order flow at $1083.80 in December. This will tell us if the bulls or the bears are in control. Look for increased volatility on December 16, following the release of the Fed’s monetary policy statement.