Gold futures trading lower on Globex

Gold futures daily chart - February 2014 contract
Gold futures daily chart – February 2014 contract

These are unhappy times for gold bugs as the precious metal continues to struggle, with each rally higher failing to gather any momentum, before collapsing lower once again. The last few days have seen yet another of these false dawns, with the initial trigger from a technical perspective, being the long legged doji candle of Friday, which gave some cause to hope for a reversal in the longer term bearish sentiment. This indeed occurred, but the rally appears to have lasted just two days, with yesterday’s price action squeezed into a narrow range as the metal ran into the deep resistance overhead in the $1262 per ounce region. This was despite Tuesday’s price action, with a wide spread up candle which hinted at a more sustained move higher. However, the key point here was the associated volume – hardly dramatic, and clearly revealing the lack of interest from buyers at present, with yesterday’s narrow spread merely confirming this view. Overnight on Globex, the February contract has been trading with a heavily bearish tone, and at the time of writing is currently testing the $1237 per ounce level.

What is perhaps more worrying still for gold bugs, is that the current weakness in the US dollar, ahead of next week’s FOMC statement, is failing to help gold move higher. Indeed, the two are currently moving in tandem, with the inverse relationship apparently breaking down ( albeit temporarily ) once again. Very different from oil, which has been a beneficiary of this weakness. Silver meanwhile, is following a similar path to gold, so for the time being, this is one relationship that remains relatively intact in these difficult and challenging times.

Sadly, for gold bugs, the next short term level of support is now clearly in sight at the $1210 per ounce level, and if this is breached, then as I have outlined before, we could see a much deeper move down to $1180 per ounce and below. At some point, gold will recover, and recover strongly in my view, but as always, volume will reveal all, particularly on the longer term charts. The weekly timeframe is the one to watch for longer term gold bugs and gold investors. Until that buying climax arrives though, it’s more of the same to the end of the year.

By Anna Coulling

About Anna 1036 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

2 Comments on Gold futures trading lower on Globex

  1. Anna

    I have just opened an platform with Axicorp the main reason they do the Newyork close 5 day charts.

    I want to open another platform in the uk what platform do you use.

    I have seen some of your dvds must catch up with of to church now to sing xmas carols.

    Have a good Xmas.

    Terry Shead

    • Hi Terry – many thanks for your question and kind wishes. With regard to my primary platform I use Ninjatrader (powerful and free platform) coupled with Interactive brokers for my brokerage with the Kinetick data feed which works perfectly. The reason I use IB mainly is that they offer every market from stocks to futures and options as well as spot forex, so all covered in the one account. I do use other platforms such as MT4 which is a great platform and simple to use primarily for spot forex. Hope this helps – have a great Xmas and a prosperous New Year and enjoy your trading in 2014 – all best wishes Anna

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