U.S. Indices Open In The Green: Key Levels For Gold

Posted Monday, February 12, 2018 by
Shain Vernier • 1 min read

For a Monday morning, the markets are showing signs of life. The U.S. indices have opened in the green, extending the momentum established during Friday’s close. Commodity pricing is also on the rebound, as gold and WTI crude oil are both in the positive.

The relationship between gold and the indices has been mysterious thus far in 2018. Traditionally, as money flows out of equities, gold receives a bump to the topside. This has not been the case today, with the bulls dominating trade in both asset classes.

Gold Technicals

If you capitalized upon the sell signal from earlier, well done! It turned in a strong performance and was a solid way to start the trading week.

April Gold Futures (GC), Daily Chart

Topside resistance has held and this market appears to be entering a consolidation phase. Here are the levels to watch for today’s session:

  • Resistance(1): Bollinger MP, 1330.3
  • Resistance(2): 20 Day EMA, 1331.6
  • Support(1): Macro 38% retracement, 1321.7
  • Support(2): Macro 50% retracement, 1306.6

Overview: For now, gold is making a moderate recovery after the last 3 weeks of bearish action. Price has stalled at the Bollinger MP, with the current intraday high coming in at 1330.0. As long as this level holds, my bearish bias will remain intact.

For the near future, I will have buy orders in at 1307.1 just in front of the macro 50% retracement. With an initial stop at 1304.9, this trade is worth 22 ticks using a 1:1 R/R management plan. As always, trade smart and for tomorrow!

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