The direction of the December Comex gold market early Wednesday is likely to be determined by trader reaction to $1787.90.
Gold futures traded lower on Tuesday, pressured by a firm U.S. Dollar and increased demand for risky assets ahead of a highly-anticipated U.S. Federal Reserve meeting that could provide a timeline on the Fed’s first post-pandemic rate hike amid rising inflationary pressures.
On Tuesday, December Comex gold settled at $1788.90, down $6.90 or -0.38%.
In addition to remarks on its rate hike schedule, the Fed is expected to approve plans to scale back its massive stimulus program on Wednesday, when it concludes a two-day policy meeting.
The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $1760.30 will change the main trend to down. A move through $1815.50 will reaffirm the uptrend.
The minor trend is down. This is controlling the momentum. A move through $1812.70 will change the minor trend to up. Taking out $1772.40 will indicate the selling pressure is getting stronger.
On the upside, the nearest resistance is a pair of 50% levels at $1795.00 and $1800.00.
On the downside, potential support is lined up at $1787.90, $1780.50, $1768.30 and $1757.40.
The direction of the December Comex gold market early Wednesday is likely to be determined by trader reaction to $1787.90.
A sustained move over $1787.90 will indicate the presence of buyers. This could lead to a labored rally with potential resistance at $1795.00 and $1800.00.
A sustained move under $1787.90 will signal the presence of sellers. The first downside target is $1772.40, followed closely by $1768.30.
If $1768.30 fails as support then look for a further decline into $1760.30, followed closely by $1757.40.
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.