It has been a strong Friday on Wall Street, with the DJIA DOW (+180), S&P 500 SPX (+13), and NASDAQ (+56) posting bullish rallies. At this point, U.S. equities are pushing all-time highs as investors digest the last week of equities reports. Neither sub-par economic numbers nor the threat of a Trump impeachment are deterring bidders from assuming fresh risk exposure going into the weekend break.

On the commodities front, WTI crude oil and gold are showing strength. Each is holding above key long-term natural support levels, $55.00 and $1500.0 respectively. Perhaps one of the reasons for diversification into gold is today’s lagging Michigan Consumer Sentiment Index. The figure came in at 95.5 for October, beneath the industry estimates of 96.0. While this is only a moderate miss, it extends the string of disappointing U.S. metrics.

December Gold Futures Hold Firm As Equities Rally

Although the equities markets are booming, it appears that institutional money is taking out an insurance policy in December gold. Prices are holding firm above $1500.0 and appear poised for a rally even though U.S. stocks are pushing all-time highs.

On the weekly chart, December gold is still very much in an uptrend. The summertime rally is intact and values are above $1500.0. If U.S. equities extend all-time highs next Monday or Tuesday, a retracement in bullion is likely.

Going into next week’s trade, there are two intermediate-term levels to watch for gold:

• Two Way Catalyst: Psychological Level, 1500.0
• Support(1): 38% Weekly Retracement, $1458.7

Bottom Line: In the event equities continue to dominate the markets, a buying opportunity may set up for December gold. Until elected, I will have buy orders in the queue from 1461.5. With an initial stop at 1447.5, this position trade produces 280 ticks on a 1:2 risk vs reward management plan.