December Gold Futures: Intraday Short Possibility

December gold futures are showing tentative strength early on in the U.S. session. Concerns over a weakening dollar and the flagging U.S. equities markets have caused many traders to turn attention to the bullion market. As covered a bit earlier by my colleague Skerdian, we are at a crucial time for the gold trade.

No matter if you are trading CFDs, forex or outright futures, gold is a consistent provider of opportunity. Let’s see if we can identify a few key areas in today's December gold futures market.

Technicals

The electronic session for December gold has produced a nice 135 tick range. After an initial test under Friday’s low on the open, we have seen a pronounced rally.

December Gold Futures- Test And Rally

A few key technicals:

• Rejection under last Friday’s low of 1289.1 is further evidence of the cautionary stance taken by investors. Right now, safety has value.

• Key psyche level of 1300.0 is likely to see heavy participation

• Friday’s swing high of 1307.0 will act as topside stop loss area for short sellers

• Resistance at 62% (1300.1) and 78% (1303.1) of Friday’s range are primed areas to short for the remainder of the U.S. session.

Bottom Line: I like big, round numbers. It seems that more often than not they establish the trading ranges facing a product. For this week, the 1300.0 for December gold futures will be an area of interest.

A premium short day trade level is from 1303.1 with a concrete stop above Friday’s high at 1307.0. This sets up a very reasonable 1:1 ratio play with rotation back towards today’s value area.