Gold futures are trading nearly flat late Tuesday with gains capped by demand for risky assets and a stronger USD.
The market may have been underpinned by slightly weaker US Treasury yields.
Fundamentally, the market was pressured by stronger-than-expected US economic data, but may have been supported by concerns over the lack of details about the US-China trade deal and renewed concerns over BREXIT
At 21:40 GMT, February COMEX gold is trading at 1481.10, up 0.60 or +0.03%.
The main trend is up according to the daily swing chart. But, Northside momentum has been stalled since the formation of the closing price reversal top at $1491.60 on 12 December.
A trade through 1491.60 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at 1463.00.
The main range is 1525.20 – 1453.10. Its Fibo retracement zone at 1489.20 – 1497.70 is resistance. This zone stopped the rally at 1489.90 on 4 December and at 1491.60 on 12 December. It is controlling the near-term direction of the market.
The short-term range is 1453.10 – 1491.60. Its Fibo retracement zone at 1472.40 – 1467.80 is support.
February COMEX gold has been trading between a pair of retracement zones for several weeks. It’s also formed 2 higher bottoms and 2 higher Tops. This indicates there is a growing upside bias. The longer the market remains inside the elongated trading range, the bigger the breakout move.
The biggest concern now is the low volume. Without rising volume, a breakout to the Northside is likely to fail. For that matter, the same goes for a break down under support.
What we want to see is a breakout move that is driven by more than just buy stops or sell stops.