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Triple Bottom In Play For December Gold Futures

Posted Wednesday, November 11, 2020 by
Shain Vernier • 2 min read

It’s been a rough three days for GOLD as COVID-19 vaccine hopes have shaken safe-haven sentiment. Today has brought more pain to bullion holders, with values sliding nearly 1%. Now, the prices of December gold futures are in the area of a key triple-bottom pattern on the daily chart.

For the session, safe-havens are once again taking it on the chin. The USD/CHF and USD/JPY are both extending weekly gains. This price action favors the Greenback as market participants shift into risk assets. At this point, one is hard-pressed to argue that election and coronavirus uncertainty isn’t subsiding.

Once again, it’s Veteran’s Day and that means a relaxed U.S. economic calendar. However, this dynamic is soon to change. Thursday brings the release of October’s CPI figures, as well as the weekly jobless claims numbers. Month-over-month CPI is expected to hold firm at 0.2%, suggesting flat inflation. While this is a primary market mover, I don’t expect a whole lot of action unless we see a major deviation from expectations.

Let’s take a look at December gold futures and see where the world’s premier safe-haven may be heading.

December Gold Futures Challenge Daily Triple-Bottom

Monday was a crazy day on the markets as Pfizer’s COVID-19 vaccine dominated headlines. December gold futures plunged amid the news, putting in a hard test of the 1850.0 area. Now, prices remain below topside resistance and in bearish territory.

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

Here are the key levels to watch in this market for the rest of the week:

  • Resistance(1): Daily SMA, 1901.8
  • Resistance(2): Bollinger MP, 1902.2
  • Support(1): Triple-Bottom 1851.1-1848.0

Bottom Line: At press time, December gold futures appear to be setting up in a classic “L” formation. If we see a late-week bump in pricing, selling topside resistance may be a good trade.

As long as Monday’s bottom is a valid swing low (1848.0), I’ll have sell orders in at 1893.9. With an initial stop at 1905.9, this trend-following trade produces 100 ticks on a slightly sub-1:1 risk vs reward ratio.

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