Gold Price Futures (GC) Technical Analysis – Next Target Election Night High at $1353.00

December Comex Gold futures sprang to life on Monday, taking out a recent top at $1307.00 and sending prices to their highest level since November 9, as investors continued to react to the speech by European Central Bank President Mario Draghi on Friday at the Jackson Hole Central Bankers’ conference.

In his speech, Draghi said the bank’s ultra-loose monetary policy was working and that the Euro Zone’s economic recovery has taken hold, refraining from commenting on the Euro’s recent strength.

Also at Jackson Hole, Fed Chair Janet Yellen made no mention to U.S. monetary policy, but instead stuck to her script by focusing on financial regulations. This sent a signal to traders that the Fed was likely to move slowly when raising rates.

The combination of the two speeches pushed U.S. Treasury yields lower, making the dollar a less attractive investment and helping to boost demand for dollar-denominated gold.

Gold prices were also supported by generally weaker demand for higher-yielding assets.

Technical Analysis

Gold held a steep uptrending angle at $1297.30 early in the session. The momentum created by the buying was strong enough to trigger buy stops over the August 18 top at $1306.90 and the April 17 top at $1307.00.

Although the rally stalled at $1313.30 with gold up $15.40, the daily chart shows there is plenty of room to the upside with the next major target coming in at $1353.00. This top was put in on November 9, 2016 and was created one-day after President Trump unexpectedly won the U.S. Presidential election.

Now that the market has crossed to the strong side of $1307.00, it’s important for buyers to come in and defend the uptrend. Breaking back under this level will confirm that the breakout was fueled by buy stops rather than new buyers.