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James Hyerczyk
Comex Gold

Gold futures rose on Wednesday due to a drop in U.S. Treasury yields. And Treasury yields fell after renewed trade concerns fueled investor demand for safer assets like U.S. debt. Gold retreated from its session high after the benchmark S&P 500 Index and blue chip Dow Jones Industrial Average hit record highs late in the session.

At 21:15 GMT, December Comex gold futures are trading $1464.20, up $10.50 or +0.72%.

Trading is going to be tough if one tries to play both Treasurys and stocks against gold. The headline writers will have you believe gold rallied because a snag in U.S.-China trade relations drove down demand for risky assets. However, gold still held on to most of its gains even with the Dow closing at a record high.

Trying to trade gold against stocks can actually create more confusion. If you’re going to trade gold with an outside market indicator then use Treasury markets as your guideline. Yields spiked lower and gold spiked higher is all you need to know.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1446.20 will signal a resumption of the downtrend. The main trend will change to up on a trade through $1522.30. This is highly unlikely over the short-run unless Treasury yields completely collapse. However, there is room for a short-covering rally and a normal 50% counter-trend retracement.

The main range is formed by the August 1 bottom at $1412.10 and the September 4 top at $1566.20. Its retracement zone at $1471.00 to $1489.20 is controlling the near-term direction of the market. Currently, it is acting like resistance.

The short-term range is $1522.30 to $1446.20. Its 50% level at $1484.10 is another potential upside target.

The two 50% levels form a potential resistance cluster at $1484.10 to $1489.20. This is probably the next upside target area.


Daily Swing Chart Technical Forecast

Based on Wednesday’s price action and the current price at $1464.20, the direction of the December Comex gold market late Wednesday/early Thursday is likely to be determined by trader reaction to the main Fibonacci level at $1471.00.

Bearish Scenario

A sustained move under $1471.00 will indicate the presence of sellers. The first target is a minor 50% level at $1457.00. Aggressive counter-trend buyers could come in on a test of this level in an effort to form a secondary higher bottom. If it fails then look for the selling to possibly extend into the new minor bottom at $1446.20.

Bullish Scenario

Overcoming and sustaining a rally over $1471.00 will signal the presence of buyers. If this move creates enough upside momentum then look for a potential surge into $1484.10 to $1489.20.

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