Triple Bottom In Play For December Gold Futures
Once again, it’s Veteran’s Day and that means a relaxed U.S. economic calendar. However, this dynamic is soon to change.
It’s been a rough three days for GOLD as COVID-19 vaccine hopes have shaken safe-haven sentiment. Today has brought more pain to bullion holders, with values sliding nearly 1%. Now, the prices of December gold futures are in the area of a key triple-bottom pattern on the daily chart.
For the session, safe-havens are once again taking it on the chin. The USD/CHF and USD/JPY are both extending weekly gains. This price action favors the Greenback as market participants shift into risk assets. At this point, one is hard-pressed to argue that election and coronavirus uncertainty isn’t subsiding.
Once again, it’s Veteran’s Day and that means a relaxed U.S. economic calendar. However, this dynamic is soon to change. Thursday brings the release of October’s CPI figures, as well as the weekly jobless claims numbers. Month-over-month CPI is expected to hold firm at 0.2%, suggesting flat inflation. While this is a primary market mover, I don’t expect a whole lot of action unless we see a major deviation from expectations.
Let’s take a look at December gold futures and see where the world’s premier safe-haven may be heading.
December Gold Futures Challenge Daily Triple-Bottom
Monday was a crazy day on the markets as Pfizer’s COVID-19 vaccine dominated headlines. December gold futures plunged amid the news, putting in a hard test of the 1850.0 area. Now, prices remain below topside resistance and in bearish territory.
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Here are the key levels to watch in this market for the rest of the week:
- Resistance(1): Daily SMA, 1901.8
- Resistance(2): Bollinger MP, 1902.2
- Support(1): Triple-Bottom 1851.1-1848.0
Bottom Line: At press time, December gold futures appear to be setting up in a classic “L” formation. If we see a late-week bump in pricing, selling topside resistance may be a good trade.
As long as Monday’s bottom is a valid swing low (1848.0), I’ll have sell orders in at 1893.9. With an initial stop at 1905.9, this trend-following trade produces 100 ticks on a slightly sub-1:1 risk vs reward ratio.
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