Sellers continued to drive December Comex Gold futures lower on Wednesday with the market closing in a position to take out the October 2 bottom at
Sellers continued to drive December Comex Gold futures lower on Wednesday with the market closing in a position to take out the October 2 bottom at $1103.80. The market has been under pressure since October 28 when the Fed’s monetary policy statement put the possibility of a December rate hike back on the table.
The main trend is down according to the daily swing chart.
Based on yesterday’s close at $1106.20, the first downside target is the main bottom at $1103.80. This is followed by the September 11 main bottom at $1097.70.
The daily chart opens up to the downside on a sustained move under $1097.70 with the next potential target the July 24 main bottom at $1073.70.
Holding $1103.80 will indicate the presence of buyers. This will likely be short-covering or profit-taking, not aggressive counter-trend buying. The first upside target is a long-term uptrending angle at $1115.80.
The daily chart opens up further to the upside with potential targets at $1127.80 and $1135.10. Because volatility and volume are expected to remain below average today, I don’t expect these levels to be reached.
Watch the price action and read the order flow at $1103.80 today. Trader reaction to this level will determine the tone of the market today.
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.