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James Hyerczyk

Gold futures are trading lower at the mid-session on Thursday, but the tight range on below average volume suggests the major players are on the sidelines ahead of Friday’s speech from Federal Reserve Chairman Jerome Powell at the central bankers’ symposium at Jackson Hole, Wyoming. Investors aren’t sure how to play gold ahead of the speech because of uncertainty over the aggressiveness of the Fed in its effort to perk up the economy and prevent a U.S. recession.

At 16:35 GMT, December Comex gold is trading $1508.30, down $7.40 or -0.47%.

Daily December Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been drifting sideways to lower since the formation of the closing price reversal top at $1546.10 on August 13.

A trade through $1546.10 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1488.90 will confirm the closing price reversal top.

The minor range is $1546.10 to $1488.90. Its 50% level or pivot at $1517.50 is controlling the immediate direction of the market. This level has been acting like resistance all week.

The short-term range is $1412.10 to $1546.10. Its retracement zone at $1479.10 to $1463.30 is the first downside target.

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Daily Technical Analysis

Based on the early price action, the direction of the December Comex gold futures contract into the close is likely to be determined by trader reaction to the pivot at $1517.50.

Bearish Scenario

A sustained move under $1517.50 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into low at $1488.90, followed by the short-term 50% level at $1479.10, the uptrending Gann angle at $1472.10 and the short-term Fibonacci level at $1463.30.

Bullish Scenario

A sustained move over $1517.50 will signal the presence of buyers. This could trigger a rally into a steep uptrending Gann angle at $1532.10. Overcoming this angle will indicate the buying is getting stronger with $1546.10 the next major upside target.

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