Gold futures are trading higher but well off their highs shortly after the regular session opening on Monday. The early strength was fueled by escalating tensions in the Middle East after a drone attack on Saudi Arabian oil facilities over the week-end.
Safe-haven buying drove U.S. Treasury yields lower, helping to make gold a more attractive investment. Bullish traders are also betting that higher oil prices will trigger a global economic slowdown that will force central banks to cut interest rates further.
At 13:09 GMT, December Comex gold is trading $1508.10, up $8.60 or +0.57%.
The market could turn bearish later today or on Tuesday if the Saudi repair the damage sooner than expected.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1492.10 will signal a resumption of the downtrend. The main trend will change to up on a trade through $1566.20.
The minor trend is also down. A trade through $1532.20 will change the minor trend to up. This will also shift momentum to the upside. A trade through the minor bottoms at $1493.10 and $1492.10 will indicate the selling is getting stronger.
The short-term range is $1566.20 to $1492.10. Its retracement zone at $1529.20 to $1537.90 is the nearest upside target. This zone stopped the selling at $1532.20 on Thursday.
The main range is $1412.10 to $1566.20. Its retracement zone at $1489.10 to $1471.00 is potential support.
Daily Technical Forecast
Based on the early price action and the current price at $1508.10, the direction of the December Comex gold market on Monday is likely to be determined by trader reaction to the uptrending Gann angle at $1502.40 and the downtrending Gann angle at $1502.20.
A sustained move over $1502.40 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into $1529.20 to $1534.20.
A sustained move under $1502.20 will signal the presence of sellers. This could trigger a break into $1493.10, $1492.10 and $1489.10.
If $1489.10 fails as support then look for a spike into the uptrending Gann angle at $1474.10.
This article was originally posted on FX Empire
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