December Comex Gold futures are trading lower shortly before the regular session opening after sellers rejected an earlier attempt to breakout to the upside. The catalyst behind the selling is the stronger U.S. Dollar. The greenback is being treated as a safe-haven asset today due to escalating trade tensions between the United States and China. This is leading to lower foreign demand for dollar-denominated gold.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, we’re going to be watching for a shift in momentum due to Friday’s potentially bullish closing price reversal bottom.
A trade through $1212.50 will negate the closing price reversal bottom and signal a resumption of the downtrend. A move through $1228.50 will confirm the reversal bottom. This could trigger the start of a 2 to 3 day counter-trend rally. The main trend will change to up on a trade through $1244.70.
The minor trend is down. It will change to up on a trade through $1237.80. This will also support a shift in momentum to the upside.
The short-term range is $1244.70 to $1212.50. Its 50% level or pivot at $1228.60 is controlling the direction of the gold market.
The main range is $1278.20 to $1212.50. If the trend changes to up then its retracement zone at $1245.40 to $1253.10 will become the primary upside target.
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Daily Technical Forecast
Based on the early price action, the direction of the December Comex Gold market on Monday is likely to be determined by trader reaction to the downtrending Gann angle at $1224.70.
A sustained move under $1224.70 will indicate the presence of sellers. If this move creates enough downside momentum then look for a drive into last week’s low at $1212.50.
A sustained move over $1224.70 will signal the presence of buyers. This could lead to a quick test of the pivot at $1228.60.
Overtaking $1228.60 could trigger an acceleration to the upside with potential targets lined up at $1234.70, $1237.80 and $1238.20.