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James Hyerczyk
Gold Bars and Dollar

Gold is easing higher on Monday shortly before the regular session opening. Earlier in the session, sellers attempted to follow-through to the downside, following Friday’s steep sell-off, but there wasn’t much volume behind the move.

Stocks are edging lower along with Treasury yields. This is helping to make the U.S. Dollar less-attractive, while increasing demand for dollar-denominated gold. Traders sold gold on Friday because of stronger-than-expected U.S. economic data. However, most of the week, it was trading higher because of concerns over the progress of the U.S.-China trade talks.

At 10:09 GMT, February Comex gold is trading $1467.10, up $2.00 or +0.14%.

Daily February Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on December 4 at $1489.90.

A trade through $1456.60 will change the main trend to down. A move through $1489.90 will negate the closing price reversal top and signal a resumption of the uptrend.

The short-term range is $1456.60 to $1489.90. It is currently trading on the weak side of its retracement zone at $1469.30 to $1473.30, making it resistance.

The main range is $1525.20 to $1453.10. Its retracement zone at $1489.20 to $1497.70 is resistance. The lower or 50% level of this range stopped the selling last week at $1489.90.

On the downside, the major target is a 50% level at $1432.00.

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Daily Technical Forecast

Based on the early price action and the current price at $1467.10, the direction of the February Comex gold futures contract on Monday is likely to be determined by trader reaction to the uptrending Gann angle at $1464.60.

Bullish Scenario

A sustained move over $1464.60 will indicate the presence of buyers. This could trigger a labored rally with potential resistance lined up at $1469.30, $1472.60, $1473.30 and $1475.20. The latter is a potential trigger point for an acceleration to the upside with the next targets $1489.20 and $1489.90.

Bearish Scenario

A sustained move under $1464.60 will signal the presence of sellers. Additional support angles come in at $1460.60 and $1458.60. The latter is the last potential support angle before the $1456.60 and $1453.10 main bottoms.

Side Notes

Monday’s price action suggests Friday’s sell-off may have been a little overcooked. I think traders realize it’s not about the economy at this time, per se, but rather the outcome of the trade talks with the December 15 deadline looming.

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