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James Hyerczyk
Comex Gold
Comex Gold

Gold futures weakened on Monday, falling toward a one-year low hit just last week as the U.S. Dollar shrugged off earlier weakness to close higher for the session. This dampened foreign demand for dollar-denominated gold.

On Monday, December Comex Gold settled at $1234.40, down $6.00 or -0.49%.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1221.00 will signal a resumption of the downtrend.

The minor trend is also down. A new minor top has formed at $1244.70. A trade through this top will change the minor trend to up. This will also shift momentum to the upside.

The minor range is $1221.00 to $1244.70. Its 50% level or pivot is $1232.90. This level is important because aggressive counter-trend buyers may step in on a test of this level. They are going to try to form a secondary higher bottom. This will be the first sign that the buying is greater than the selling at current price levels.

The main range is $1278.20 to $1221.00. If the minor trend changes to up then its retracement zone at $1249.60 to $1256.30 will become the primary upside target. Gains could be limited by a test of this zone because the main trend is down.

Daily December Comex Gold (Close-Up)

Daily Swing Chart Forecast

Based on the early price action, the direction of the December Comex Gold futures contract on Tuesday is likely to be determined by trader reaction to the 50% level at $1232.90.

Bearish Scenario

A sustained move under $1232.90 will indicate the presence of sellers. If this move generates enough downside pressure, we could see a drive into the main bottom at $1221.00.

Taking out $1221.00 will indicate the selling pressure is getting stronger. This is a potential trigger point for an acceleration to the downside with the longer-term target the December 16, 2016 main bottom at $1162.00.

Bullish Scenario

A sustained move over $1232.90 will signal the presence of buyers. If the buying gets stronger on this move then look for gold to make a run at $1244.70.

Although the minor trend will change to up on a trade through $1244.70, since the main trend is down, sellers are likely to return to defend the trend on a test of $1249.60 to $1256.30.

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