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James Hyerczyk
Comex Gold

Gold futures are trading lower early Tuesday after posting an inside-day, lower-close the previous session. The price action suggests the market is likely to remain rangebound over the near-term in what can best be described as an “ugly” chart pattern. Currently, the market is trading just below the halfway point of its September to October range. So essentially, while logging a lot of miles with about eight price swings over a two month time period, the market has gone nowhere.

At 04:42 GMT, December Comex gold futures are trading $1507.50, down $3.60 or -0.24%.

Usually, uncertainty drives volatility, but with gold, uncertainty over interest rates and the trade deal is driving volatility down, while holding prices in a range. Central bankers calling it quits on further rate cuts is one problem. Hopes of a near-term trade deal are another. In the meantime, the money keeps flowing into higher-yielding assets like stocks.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1522.30 will change the main trend to up. A move through $1478.00 will signal a resumption of the downtrend. Everything in between is just chop.

The minor trend is also down. A trade through $1520.90 will change the minor trend to up. A move through $1483.10 will signal a resumption of the downtrend. There’s no payoff, however, buying strength and selling weakness through those levels because the main tops and bottoms will get in the way.

The major range is $1396.40 to $1566.20. Its 50% to 61.8% retracement zone at $1481.30 to $1461.30 is support.

Another range is $1412.10 to $1566.20. Its retracement zone comes in at $1489.20 to $1471.00.

The short-term range is $1566.20 to $1465.00. Its retracement zone at $1515.60 to $1527.50 is resistance.  Since October 1, this zone has stopped rallies at $1525.80, $1522.30, $1520.90 and $1519.00.


Daily Swing Chart Technical Forecast

Based on the price action the past three sessions and the current price at $1507.50, the direction of the December Comex gold market the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term 50% level at $1515.60.

Bearish Scenario

A sustained move under $1515.60 will indicate the presence of sellers. This could lead to a steep sell-off since the next target is the 50% level at $1489.20.

Bullish Scenario

Overtaking $1515.60 will signal the presence of buyers. This could lead to a labored rally with potential resistance lined up at $1519.00, $1520.90, $1522.30 and $1525.80 before it reaches the short-term Fibonacci level at $1527.50.

The Fibonacci level at $1527.50 is a potential trigger point for an acceleration to the upside with $1543.30 the next major target.

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