Gold futures are trading nearly flat late Tuesday with gains stifled by demand for risky assets and a stronger dollar. The market may have been underpinned by slightly weaker U.S. Treasury yields. Fundamentally, the market was pressured by stronger-than-expected U.S. economic data, but may have been supported by concerns over the lack of details about the U.S.-China trade deal and renewed concerns over Brexit.
At 21:40 GMT, February Comex gold is trading $1481.10, up $0.60 or +0.03%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, upside momentum has been stalled since the formation of the closing price reversal top at $1491.60 on December 12.
A trade through $1491.60 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at $1463.00.
The main range is $1525.20 to $1453.10. Its retracement zone at $1489.20 to $1497.70 is resistance. This zone stopped the rally at $1489.90 on December 4 and at $1491.60 on December 12. It is controlling the near-term direction of the market.
The short-term range is $1453.10 to $1491.60. Its retracement zone at $1472.40 to $1467.80 is support.
February Comex gold has been trading between a pair of retracement zones for several weeks. It’s also formed two higher bottoms and two higher tops. This indicates there is a growing upside bias. The longer the market remains inside the elongated trading range, the bigger the breakout move.
The biggest concern is the low volume. Without rising volume, a breakout to the upside is likely to fail. For that matter, the same goes for a break down under support.
What we’d like to see is a breakout move that is fueled by more than just buy stops or sell stops.
This article was originally posted on FX Empire
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