Lower Treasury yields, a falling U.S. Dollar and weaker stocks are helping to drive gold prices higher on Thursday. It looks as if investors may finally be recognizing gold as a safe-haven asset. However, it still needs to validate the shift in sentiment by taking out tops. Right now, all we have is a series of higher bottoms. The bulls want to see higher tops.
At 1100 GMT, December Comex Gold futures are trading $1206.70, up $13.30 or +1.11%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1215.80 will change the main trend to up. A move through $1184.30 will signal a resumption of the downtrend.
A series of retracement levels is controlling the price action.
On the downside, the support levels come in at $1205.30, $1203.80, and $1200.10. This is followed by $1193.90 and $1187.60.
On the downside, the first upside target is $1214.70, followed by $1221.90. It then jumps to $1235.10.
Daily Swing Chart Technical Forecast
Based on the current price at $1206.70, the key area to watch $1205.30 to $1203.30.
A sustained move over $1205.30 will indicate the buying is getting stronger. If this creates enough upside momentum then look for buyers to make a run at $1214.70 then $1215.80.
Once $1215.80 is taken out, the market is likely to try to take out tops at $1218.00 and $1220.70. The trigger point for an acceleration to the upside is $1221.90.
A sustained move under $1203.80 will signal the presence of sellers. Under this level, support is staggered at $1200.10, $1293.90 and $1187.60.
The bullish chart pattern will fail if $1184.30 is taken out.