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James Hyerczyk
Gold Chart
Gold Chart

December Comex Gold futures are trading higher on Monday. A weaker U.S. Dollar is helping to drive up demand for the dollar-denominated asset. Flight-to-safety buying is also driving gold higher as investors prepare for renewed stock market volatility. After last week’s spike to the upside, the rally could become labored due to a series of retracement zones.

Daily December Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up last week when buyers took out a series of swing tops. A trade through $1184.30 will change the main trend to down.

The next main top target is $1244.70, followed by $1278.20.

The short-term range is $1278.20 to $1167.10. Its retracement zone at $1222.70 to $1235.80 is currently being tested. This zone is just another stair-step in the rallying process.

The intermediate range is $1325.50 to $1167.10. Its retracement zone at $1246.30 to $1264.90 is the next upside target. As you can see, the zones are beginning to widen which suggests upside momentum is building.

The main range is $1388.10 to $1167.10. Its retracement zone at $1277.50 to $1303.80 is the major upside target. This range is even wider.

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Daily Technical Forecast

Based on the early price action, the direction of December Comex Gold the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at $1235.80.

A sustained move under $1235.80 will indicate the presence of sellers. This could drive the market back into the 50% level at $1222.70. Taking out this level could trigger an acceleration to the downside.

A sustained move over $1235.80 will signal the presence of buyers. If the buying increases then look for a test of $1244.70. Taking out this level will reaffirm the uptrend. However, taking out the intermediate 50% level at $1246.30 could trigger an acceleration into the intermediate Fibonacci level at $1264.90.

We could be looking at a labored rally today until the market reaches $1246.30. This is the key level that buyers need to take out in order to extend the rally.

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