Comex Gold

Gold Price Futures (GC) Technical Analysis – Could Strengthen Over $2007.10, Weaken Under $1981.70

Gold futures rose on Monday, clawing back a little more of last week’s 4.5% plunge. The market has now recovered about 62% of the recent top to bottom plunge.

Helping to boost gold was a weaker U.S. Dollar, softer Treasury yields and disappointing U.S. economic data. Gains may have been limited, however, ahead of Wednesday’s release of the minutes from the Fed’s July monetary policy meeting.

On Monday, December Comex gold settled at $1998.70, up 48.90 or +2.51%.

On the data front, the New York Fed’s Empire State business conditions index tumbled to 3.7 in August from 17.2 in July – far lower than the 15 points forecast by a Reuters survey.

The major catalyst for gold traders could be Wednesday’s Fed minutes. Traders will be looking for any hints of a possible change to its guidance at its next review in September. Signs of further dovish central bank policy could create the spark needed for further rallies.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2089.20 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest swing bottom at $1874.20.

The short-term range is $2089.20 to $1874.20. Its retracement zone at $1981.70 to $2007.10 was the primary upside target. On Monday, gold settled inside this range.

The main range is $1690.10 to $2089.20. Its retracement zone at $1889.70 to $1842.60 stopped the selling last week at $1874.20.

Short-Term Outlook

Trader reaction to the short-term retracement zone at $1981.70 to $2007.10 should set the tone on Tuesday. This zone is very important to the structure of the market.

Aggressive counter-trend traders are going to try to stop the rally. They are going to try to form a potentially bearish secondary lower top. This could lead to an eventual change in trend to down.

Trend-trading buyers are going to try to take out the Fibonacci level at $2007.10. Then they are going to try to establish support at the retracement zone. A sustained move over this area will help solidify the importance of the new main bottom at $1874.20 and the main retracement zone at $1889.70 to $1842.60.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.