We Have An Intraday Scalp For December Gold Futures

The run to safe-havens has been muted so far in this week’s trade of gold. As of now, we are showing two big red candles on the daily chart from Friday and Monday’s sessions. The theme for this week is quickly becoming risk-on!

Yesterday’s gold brief has given us some key levels to watch as they relate to the December gold futures. As advertised, we do have an opportunity to execute a short-term scalping strategy to grab a few ticks.

Technicals

The December gold futures market is trading in an extremely tight range ahead of tomorrow’s FED meeting. I expect extension as we move into the latter half of the U.S. session.

December Gold Futures, Daily Chart

There are several technical aspects of this market that jump out:

• Trade is currently below the defined support area of 1325.3-1315.5

• A Bollinger MP and SMA crossover is pending. This is an important indicator facing market sentiment. In the event it is completed, my bias will be to the bear for the intermediate term.

• The 78% of the current wave has been taken out. This suggests a test of the spike low at 1302.3 is in order.

• Today’s range failed at the 38% retracement from Monday’s low at 1313.9. Again, this signals a possible trend day down.

Trade Idea: Ahead of the FED’s pending announcement, committing to a short position may be a bit hasty. However, I am a big fan of scalping “hot” areas. Mondays low at 1308.1 will be one.

A sell at 1308.0 on December gold futures is a great area to play an intraday washout for 8-15 ticks. An R/R of 1:1 is adequate for this type of trade. It should happen fast with traders entering the market in force. If they do not, look for rotation back to the support area.

As always, trade smart and be ready for tomorrow!