Stock market volatility and fears of a global recession are helping to hold gold prices steady to higher into the close on Wednesday. However, the market is trading inside Tuesday’s wide range, which suggests some investor indecision.
The catalyst behind the price action is weaker than expected economic data from China and the Euro Zone. Chinese industrial production and retail sales came in lower than expected, while German GDP softened as the Euro Zone economy continued to feel the impact of the prolonged trade war between the United States and China.
At 19:23 GMT, December Comex gold futures are trading $1528.70, up $14.60 or +0.97%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the downside after the formation of the closing price reversal top at $1546.10 on August 13.
A trade through $1546.10 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1488.90 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction.
The minor range is $1546.10 to $1488.90. Its 50% level or pivot at $1517.50 is controlling the direction of the index.
The short-term range is $1412.10 to $1546.10. If the closing price reversal top is confirmed then its retracement zone at $1479.10 to $1463.30 will become the primary downside target. Since the main trend is up, buyers could come in on a test of this zone since it represents value.
Daily Technical Forecast
Based on the early price action and the current price at $1528.70, the direction of the December Comex gold futures contract into the close is likely to be determined by trader reaction to a pair of uptrending Gann angles at $1522.60 and $1520.40.
A sustained move over $1522.60 will indicate the presence of buyers into the close. If this move generates enough upside momentum then look for a possible rally into $1546.10. Taking out this level will indicate the buying is getting stronger. Crossing to the strong side of a steep uptrending angle at $1556.10 will put gold in a bullish position.
A sustained move under $1522.60 will signal the presence of sellers into the close. The first downside target is the pivot at $1517.50. This is a potential trigger point for an acceleration to the downside with the next targets yesterday’s low at $1488.90 and the uptrending Gann angle at $1484.10. This is the last support angle before the short-term retracement zone at $1479.10 to $1463.30.
This article was originally posted on FX Empire
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