Elements in Place for a Gold Short Covering Pop

by Archer Financial Services | Oct 06, 2017

By Teddy Sloup
To learn more about Teddy, click here

December gold futures remain in a steep bear trend, however we anticipate temporary relief as the market approaches crucial technical support.  We have been targeting $1265, the 61.8% Fibonacci Retracement, on a continuous chart over the last several weeks, and this week’s low of $1271 nearly accomplishes this target. If gold is able to hold this level, look for a near term correction to $1305.  The bear camp can use corrective rallies into $1305 to re-establish or initiate fresh shorts.  Only a close above $1305 reverses the intermediate term trend back to bullish. 

We are firm believers that gold will trade according to technicals in the near term as the outside markets and global geopolitical factors are currently carrying little market influence.  The Commitment of Traders report continues to reflect a wide disparity between the commercials and speculative longs. 

Gold Futures
Chart from Barchart.com

This is traditionally bearish and also somewhat surprising to us considering the sizeable recent selloff.  A close below $1265 is significantly bearish and opens up vast bear possibilities to $1200 and below. 

My many years of trading futures markets does make a difference. Feel free to call or email me at 312.242.7986 or teddy.sloup@archerfinancials.com if you have any questions or would like to open an account, go to our interactive New Account application at Open An Account. It is fast, saves on postage and it’s green. Thank you.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. Past results are not indicative of future results or performance. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.