Gold Futures: Technical Analysis


Gold futures traded higher late Thursday despite extremely low volume.

Traders are saying the market is being underpinned by the lack of details over the US-China trade deal, and the political uncertainty in Washington.

The low volume is being attributed to position-squaring ahead of the Christmas and New Year holidays.

At 20:35 GMT, February COMEX gold is trading 1483.20, up 4.50 or +0.31%.

A drop in Treasury yields is also responsible for gold’s strength. Yields fell, making the USD a less-attractive investment, while driving up demand for dollar-denominated gold. Yields fell after the release of mixed US economic data.

Weekly jobless claims fell to 234,000 from 252,000 the week before. However, economists were looking for a drop to 225,000.

Meanwhile, the Philadelphia Federal Reserve’s business conditions index fell to 0.3 in December from 10.4 in the prior month.

Economists expected the Philly Fed index to slip to 8.

Existing Home Sales also disappointed, coming in at 5.35-M, below the 5.44-M forecast.

Daily February COMEX Gold

The main trend is up according to the daily swing chart. A trade through 1491.60 will signal a resumption of the uptrend. The main trend will change to down on a trade through 1463.00.

The minor trend is also up. A new minor bottom was formed at 1474.30 early Thursday.

The short-term range is 1453.10 – 1491.60. Its Fibo retracement zone at 1472.40 – 1467.80 is support.

The main range is 1525.20 – 1453.10. Its Fibo retracement zone at 1489.20 – 1497.70 is resistance.

The series of higher-bottoms and higher-tops are helping to give the February COMEX gold market an Northside bias, and the elongated rectangular pattern inside a triangle chart pattern are signs of impending volatility.

We are not certain of a direction, but the price action suggests something big is building. The extremely low volume will make it difficult to post a successful breakout move now. We wait, We see.

Have a terrific weekend