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James Hyerczyk
Comex Gold

Comex gold futures are trading lower for a second straight session on Tuesday as the U.S. Dollar climbed to a near two-month peak against a basket of major currencies. U.S. Federal Reserve commentary was behind the catalyst behind the price action.

Early in the session, Federal Reserve Chair Jerome Powell told a congressional panel that the path ahead for the economy remains uncertain and the U.S. central bank will do more if needed. Additionally, Chicago Federal Reserve President Charles Evans said the economy risks recession, if the U.S. Congress fails to pass a fiscal package.

At 19:05 GMT, December Comex gold is trading $1909.70, down $0.90 or -0.05%.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out a pair of main bottoms at $1911.70 and $1908.40. A trade through yesterday’s low at $1885.40 will signal a resumption of the uptrend. The new main top is $1983.80. A trade through this price will change the main trend to up.

The main range is formed by the June 5 main bottom at $1690.10 and the August 7 main top at $2089.20. Its retracement zone at $1889.70 to $1842.60 is potential support. It stopped the selling at $1874.20 on August 12 and on Monday at $1889.70.

The new minor range is $1983.80 to $1885.40. Its 50% level at $1934.60 is the next potential upside target.

The short-term range is $2089.20 to $1874.20. Its retracement zone at $1981.70 to $2007.10 is the best resistance area.


Short-Term Outlook

The key level to watch this week is $1889.70. It’s the 50% or top level of the main retracement zone.

Holding above $1889.70 indicates that investors are trying to defend against an even steeper plunge. It also indicates that longer-term investors are recognizing this area as value.

A failure at $1889.70 won’t be a disaster, but it could lead to a test of the lower or Fibonacci level at $1842.60. Given that the longer-term fundamentals are bullish, investors have to begin to recognize the retracement zone as value or prices will collapse under the Fibonacci level.

For a look at all of today’s economic events, check out our economic calendar.
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