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James Hyerczyk
Comex Gold
Comex Gold

Gold futures are inching higher early Tuesday after Monday’s lower close and inside trading range. The price action suggests investor indecision and impending volatility following Friday’s dramatic closing price reversal bottom.

Despite the potentially bullish chart pattern, traders seem reluctant to buy strength due to expectations of rising interest rates and increasing demand for risky assets. However, it may be necessary to confirm the closing price reversal bottom.

At 0428 GMT, December Comex Gold futures are trading $1195.20, up $3.50 or +0.29%.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, Friday’s closing price reversal bottom may have stopped the selling pressure, at least temporarily. A trade through $1198.00 will confirm the closing price reversal bottom. This won’t change the trend to up, but it could lead to a 2 to 3 day counter-trend rally. It will also indicate the buying is greater than the selling at current price levels.

A trade through $1215.80 will change the main trend to up. A move through $1184.30 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is $1167.10 to $1220.70. Its retracement zone is $1193.90 to $1187.50. Buyers are trying to establish support inside this zone.

The minor range is $1215.80 to $1184.30. Its retracement zone at $1200.00 to $1203.70 is the first upside target. Since the trend is down, sellers could come in on a test of this zone.

The next major upside target is the retracement zone at $1205.90 to $1215.10. Another major 50% level comes in $1222.70.

The $1215.10 to $1222.70 retracement zone has stopped three rallies since mid-August.


Daily Swing Chart Technical Forecast

Based on today’s early price action, the direction of the December Comex Gold market the rest of the session is likely to be determined by trader reaction to the 50% level at $1193.90.

Bullish Scenario

A sustained move over $1193.90 will indicate the presence of buyers. If this generates enough upside momentum then look for a possible surge into $1200.00 to $1205.90. The market could begin to really take-off if buyers can overcome $1205.90 with conviction.

Bearish Scenario

A sustained move under $1193.90 will signal the presence of sellers. If the move is accompanied by strong volume then look for the selling to extend into $1187.50, followed by $1184.30.

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