Fibonacci Long Setting Up For Gold

2019 has already been a big year for GOLD, with values testing the 1300.0 level. Investors are treading carefully into equities in the wake of last December’s volatility. As a result, bullion has become an interesting bet for the new year. While the price action in February gold futures has been chaotic near a long-term level of Fibonacci resistance, this market remains in bullish territory for the time being.

In an update from last week facing February gold futures, I outlined the importance of the 1300.0 level. As of now, price has rejected this area of topside resistance and is headed toward a key Fibonacci support level. Let’s dig into the technicals and see if we can identify a way to capitalize on the action.

Fibonacci Support In View For February Gold Futures

Friday’s trading session was an active one for bullion, featuring a failed auction above 1300.0 and subsequent selloff. Today’s trade has been much more subdued.

For the near future, there are three levels on my radar:

• Resistance(1): 50% Retracement Of 2018’s Range, 1292.9
• Resistance(2): Psyche Level, 1300.0
• Support(1): 38% Current Wave Retracement, 1276.0

Bottom Line: Joining a prevailing trend is almost always a good idea, assuming solid trade location. The uptrend in gold is valid and going long on a pullback isn’t a bad way to play it. As long as the Swing High at 1300.4 remains intact, I will have buy orders queued up from 1276.6. With an initial stop at 1274.8, this trade produces 36 ticks using a 1:2 risk vs reward management plan.