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

Posted Monday, October 30, 2017 by
Shain Vernier • 2 min read

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?

GC Daily ChartDecember 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.

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