December Comex Gold futures are trading lower on Wednesday shortly before the regular session opening. Traders are reacting to a stronger U.S. Dollar. The Greenback is being driven higher by speculation that President Trump will choose a hawkish Fed Chair. This will put upside pressure on interest rates which would be bearish for gold.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The trend will turn up on a move through $1292.90. If the downside momentum continues then the October 6 bottom at $1262.80 will become the primary downside target.
On the upside, resistance is a Fibonacci level at $1280.20, followed by a pair of 50% levels at $1285.60 and $1286.80.
Based on the current price at $1274.90 and the earlier price action, the direction of the gold market today is likely to be determined by trader reaction to the uptrending angle at $1275.80.
A sustained move under $1275.80 will indicate the presence of sellers. If this creates enough downside momentum, we could see a test of a support cluster at $1269.30 to $1268.90 today. This is the last support area before the $1262.80 main bottom.
Overcoming $1275.80 will signal the return of buyers. This could trigger a short-covering rally into a resistance cluster at $1280.20 to $1280.40.
The downtrending Gann angle at $1280.40 is also the trigger point for an acceleration to the upside with the next target $1285.60 to $1286.80.
Watch the price action and read the order flow at $1275.80 all session. Trader reaction to this Gann angle will tell us if the buying or selling is getting stronger.