2019 has started with a bang, featuring a sell-off in U.S. stocks and rally in gold. The action is best described as “cautious,” with traders and investors limiting risk exposure while attempting to diagnose the market for the intermediate-term. As a result, February gold futures are on the bull, with values approaching two levels of macro topside resistance.
February Gold Futures: Technical Outlook
On the whole, traders are embracing the idea of holding gold for the new year. December featured an uptrend in February gold futures and the first trading day of January has preserved this bias. While it is anyone’s guess where the market will close today, gold is well above any daily support levels and appears ready to test the 1300.0 psyche level.
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Here are the levels I will be watching for the near future:
- Resistance(1): 50% Retracement of 2018’s Range, 1292.9
- Resistance(2): Psyche Level, 1300.0
Overview: The GOLD markets have been hot, but are nearing two major levels of resistance. Barring any unforeseen geopolitical developments, 1300.0 is likely to set up as an intermediate-term high for bullion.
For the remainder of the session, it will be interesting to observe how gold trades. Early optimism has given way to midday compression. If gold closes in the negative, then a position short may set up for later in the week. Be sure to stay tuned to FX Leaders for ideas on how to get in on the action.
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