December Gold Drives Above $1550.0 - Forex News by FX Leaders
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December Gold Drives Above $1550.0

Posted Tuesday, August 27, 2019 by
Shain Vernier • 2 min read

December gold futures are once again on the move north, eclipsing the $1550.0 handle. Bidders have dominated today’s action throughout the session, producing a $15 per ounce gain. At this point, it appears as though bullion is poised to make fresh yearly highs in the short-term.

Since this morning’s bullish open, U.S. stocks have posted yet another reversal. The big three indices are trending to the red, led by a 150 point drop in the DJIA. Losses in the DOW have been driven by substantial downturns in UnitedHealth and JP Morgan Chase shares. For the time being, the early-session risk-on sentiment has been replaced by an exodus to bullion and other safe-havens.

In addition to the rally in December gold futures, bond buyers were active in today’s U.S. 2-Year Note Auction. Yields plunged from 1.825% to 1.516%, a major signal that institutional capital is flowing into bonds and demand is high. Ultimately, investors are putting the brakes on risk exposure as August draws to a close.

December Gold Futures Approach Yearly Highs

For all intents and purposes, December gold futures are in a bull market. The summer season has been a good one for GOLD, with values up more than $200 per ounce.

December Gold Futures (GC), Daily Chart
December Gold Futures (GC), Daily Chart

Here are the levels to watch for the near future:

  • Resistance(1): Spike High, $1565.0
  • Support(1): 38% of August’s Range, $1506.6

Bottom Line: A longside bias is warranted for December gold, as price is trending north above 38% of August’s range ($1506.6). Accordingly, any chance to buy in on a retracement of the bullish action is a solid play.

As long as the Spike High ($1565.0) remains the top of this market, I will have buy orders ready to go from $1507.9. With an initial stop at $1504.4, this trade produces 35 pips on a static 1:1 risk vs reward ratio. At this point, a retracement to $1507.0 appears to be a bit of a longshot. However, with a bit of luck, December gold will pull back ahead of the monthly close on Friday.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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