December Comex Gold futures are trading higher shortly before the cash market opening. There was only a slight follow-through to the upside after
December Comex Gold futures are trading higher shortly before the cash market opening. There was only a slight follow-through to the upside after yesterday’s strong surge. This is because the market is nearing an important resistance cluster that will decide whether the market forms a potentially bearish secondary lower top or a potentially bullish secondary higher bottom at $1318.50.
The main trend is up according to the daily swing chart. A trade through $1384.40 will reaffirm the uptrend while a move through $1318.50 will turn the main trend to down.
The short-term range is $1384.40 to $1318.50. Its retracement zone at $1351.50 to $1359.20 is the primary upside target. This zone is controlling the near-term direction of the market.
In addition to the 50% level at $1351.50, there is an uptrending angle at $1351.10 and a downtrending angle at $1352.40. So the key resistance cluster is $1351.10 to $1352.40. We could see aggressive counter-trend selling on the first test of this area, but taking it out could lead to a fast rally into $1359.20. This is the trigger point for an acceleration into a downtrending angle at $1368.40.
If sellers win the battle at $1351.10 to $1352.40 then look for a potential break into an uptrending angle at $1338.50. The daily chart opens up to the downside under this angle with the next target angle coming in at $1328.50.
Based on the current price at $1348.80, look for the upside bias to continue on a sustained move over $1352.40 and a downside bias on a sustained move under $1351.10.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.