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James Hyerczyk
Comex Gold

Gold futures are trading flat early Monday after touching a two-week high earlier in the session. The price action is mirroring the movement in the U.S. Dollar against a basket of major currencies. Volume in both futures contracts is low so it’s hard to interpret the meaning of the intraday price action.

At 06:18 GMT, December Comex gold is trading $1973.90, down $1.00 or -0.05%.

The catalysts expected to drive the price action the rest of the session on Monday are likely to be U.S. Treasury yields, the U.S. Dollar and demand for risky assets.

Although the Fed announced a more accommodative policy move last Thursday, whereby interest rates would likely remain near zero for potentially years, the early reaction by gold investors suggests they may need a little more time to assess the impact of the move. Overall, however, most analysts believe the news will have a bullish impact on gold prices over time.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2024.60 will signal a resumption of the uptrend. A move through $1874.20 will change the main trend to down.

The minor trend is also up. A move through $1908.40 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $1690.10 to $2089.20. Its retracement zone at $1889.70 to $1842.60 is the best support area. This zone stopped the selling at $1874.20 on August 12. The recent consolidation above this area suggests it may be controlling the near-term direction of the market.

The short-term range is $2089.20 to $1874.20. Its retracement zone at $1981.70 to $2007.10 is resistance. Overcoming this area will put the market in a position to retest the multi-year high at $2089.20.

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Daily Swing Chart Technical Forecast

Based on the early price action and the activity the past three sessions, the direction of the December Comex gold futures contract the rest of the session on Monday is likely to be determined by trader reaction to the short-term 50% level at $1981.70.

Bullish Scenario

A sustained move over $1981.70 will indicate the presence of buyers. This could trigger a surge into the Fibonacci level at $2007.10, followed by the main top at $2024.60. This is a potential trigger point for an acceleration to the upside with the next major target coming in at $2089.20.

Bearish Scenario

A sustained move under $1981.70 will signal the presence of sellers. The first downside target is a minor 50% level at $1947.70. This is followed by the minor bottom at $1908.40 and the main 50% level at $1889.70.

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

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