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James Hyerczyk
Comex Gold

Gold futures are trading higher on Monday shortly after the regular session opening. The market is being guided higher by a weaker U.S. Dollar and a dip in Treasury yields. Higher demand for risky assets after last week’s stock market rally is also encouraging investors to cover short hedges placed the last two weeks as protection against a stock market crash.

At 12:34 GMT, December Comex gold is trading $1958.50, up $10.60 or +0.54%.

Bullish traders are also raising expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance on Wednesday. The central bank is expected to hold rates while elaborating on an earlier announcement of a shift to inflation targeting.

Gold could remain rangebound over the near-term as investors weigh the major headwinds coming in the form of rising vaccine hopes and positive economic data from major economies.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2001.20 will signal a resumption of the uptrend. A move through $1911.70 will change the main trend to down.

The minor trend is also up. A trade through $1975.20 will reaffirm the minor uptrend.

The minor range is $1911.70 to $1975.20. Its 50% level at $1943.50 is support.

The first minor resistance is $1954.80, followed by another minor resistance level at $1964.20.

The short-term range is $2089.20 to $1874.20. Its retracement zone at $1981.70 to $2007.10 is potential resistance. This zone stopped the rally at $2001.20 on September 1.


Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December Comex gold futures contract on Monday is likely to be determined by trader reaction to the 50% level at $1954.80.

Bullish Scenario

A sustained move over $1954.80 will indicate the presence of buyers. This could trigger a quick test of the next 50% level at $1964.20. This is a potential trigger point for an acceleration to the upside with the next two targets $1975.20 and $1981.70. The latter is also a trigger point for an acceleration into $2001.20 to $2007.10.

Bearish Scenario

A sustained move under $1954.80 will signal the presence of sellers. This could lead to a test of $1943.50. This level is a potential trigger point for an acceleration to the downside with the next target a main bottom at $1911.70.

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