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James Hyerczyk
Gold Bars and Dollar
Gold Bars and Dollar

Gold futures are trading higher on Monday, helped by a weaker U.S. Dollar and a drop in U.S. Treasury yields. Heightened volatility in the stock market is helping to drive investors into safe-haven assets like Treasurys, the Japanese Yen and gold. The catalyst behind the rally seems to be concerns over the U.S. government shutdown and worries about a global economic slowdown.

At 1523 GMT, February Comex gold futures are trading $1270.30, up $12.00 or +0.95%.

Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1270.30 will reaffirm the uptrend. This could trigger an acceleration to the upside. The main trend will change to down on a trade through $1236.50.

The minor trend is also up. The minor trend will change to down on a move through $1245.30.

The short-term range is $1236.50 to $1270.30. Its 50% level or pivot at $1253.40 is new support.

Additional support is the intermediate retracement zone at $1243.60 to $1237.20.


Daily Swing Chart Technical Forecast

Based on the early price action, the direction of February Comex gold the rest of the session is likely to be determined by trader reaction to $1270.30.

Bullish Scenario

Taking out $1270.30 will indicate the buying is getting stronger. If this move generates enough upside momentum then look for a potential surge into the July 9 top at $1284.10.

Bearish Scenario

The inability to overcome and sustain a rally over $1270.30 will signal the presence of sellers. If this creates enough downside momentum then look for a possible sell-off into the short-term pivot at $1253.40.

The current chart pattern looks bullish with plenty of room to the upside. The only pattern that could stop the rally would be a lower close.

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