U.S. Weekly Open Report: Trading Plan For Gold

This week is a big one for currencies and commodity valuations. With Wednesday’s FOMC meeting looming, traders and investors will be watching the USD and gold values closely. The month of October has been a solid one for the greenback and a weak one for bullion.

October’s price action has opened up the trading ranges a bit, giving us an opportunity to grab a few pips. There are several levels in gold that have caught my eye for today’s session. Let’s dig into the technicals.

Gold Technical Outlook

December gold futures have put in a monthly double-bottom. Are we going to see a rally in bullion?

December Gold Futures, Daily Chart

A few of the key support and resistance levels:

• Support(1): Lower Bollinger Band, 1269.5

• Support(2): Oct. double bottom, 1263.8-1262.8

• Resistance(1): 38% retracement of current wave, 1280.8

• Resistance(2): Daily SMA, 1285.6

• Resistance(3):  Bollinger MP, 1285.9

Overview: Gold has been getting hit regularly over the course of the USD’s late-year rally. For now, we may have an intermediate-term bottom at October’s low of 1262.8. Ultimately, market fundamentals will dictate the value of gold in the near-term. If the FOMC makes a surprise move on Wednesday, we could see a crazy gold market.

In the event that December gold futures post a pronounced rally for the rest of the session, a short scalping strategy from the defined resistance levels with a tight 1:1 R/R is an affordable way to trade this market.

If we see a sell-off from current levels, a long from the 38% retracement of Friday’s range (1271.1) with a stop beneath the 78% retracement of Friday’s range (1266.3) is a valid position trade for a 1:1 R/R payoff.

Stay tuned to FX Leaders for trading ideas and signals for gold, the USD, and a wide variety of asset classes.  

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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