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James Hyerczyk

Gold futures are edging slightly lower on Wednesday despite weaker U.S. Treasury yields and a drop in demand for higher risk assets. The selling pressure stems from a whip-saw trade on Tuesday that saw prices jump to a multi-year high in reaction to protests in Hong Kong and a plunge in the Argentine peso then retreat swiftly after the Trump Administration announced the delay of tariffs. The market settled lower on Tuesday, posting a potentially bearish closing price reversal top.

At 06:52 GMT, December Comex gold futures are trading $1508.00, down $6.10 or -0.40%.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the closing price reversal top indicates a shift in momentum to the downside.

A trade through $1546.10 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1488.90 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day counter-trend break.

The minor range is $1546.10 to $1488.90. Its 50% level or pivot at $1517.50 is controlling the direction of the market early in the session.

The short-term range is $1412.10 to $1546.10. Its retracement zone at $1479.10 to $1463.30 is one downside target.

The main range is $1396.40 to $1546.10. Its retracement zone at $1471.30 to $1453.60 is another potential downside target.

Since the main trend is up, buyers are likely to come in on a test of these levels.

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Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $1508.00, the direction of the December Comex gold futures contract on Wednesday is likely to be determined by trader reaction to the pivot at $1517.50.

Bearish Scenario

A sustained move under $1517.50 will indicate the presence of sellers. If this move is able to attract enough sellers then look for an eventual retest of yesterday’s low at $1488.90. Taking out this level will confirm the closing price reversal top. This could lead to a test of a series of retracement levels at $1479.10, $1471.30, $1463.30 and $1453.60. Buyers could come in on a test of these levels.

Bullish Scenario

A sustained move over $1517.50 will signal the presence of buyers. If this move is able to generate enough upside momentum then look for a test of $1546.10.

Taking out $1546.10 will negate the closing price reversal bottom and signal a resumption of the uptrend.

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