Gold Bears Now Eye Longer-Term Support at $640.00
December Comex gold futures on Thursday morning hit a fresh 14-month low of $695.20. Serious near-term technical damage has been inflicted in the precious yellow metal recently, as price action in just over two weeks’ time has seen prices fall below major psychological support levels of $900.00, $800.00 and $700.00 an ounce. Price action the past several weeks has also seen a bearish triple top reversal pattern form on the daily bar chart for December gold futures.
The emboldened gold market bears are now focusing on pushing prices to longer-term technical support at the $640.00 area, basis nearby futures. A drop in prices below that longer-term chart support level would open the door to a challenge of major psychological support at $600.00 an ounce.
For the gold market bulls to recover and begin to repair the recent serious near-term chart damage, they will have to produce a close in December futures prices back above strong chart resistance at the $780.00 area. Below that is located solid technical resistance at the September low of $739.80.
The stronger U.S. dollar recently has been a bane to the gold market bulls. If the greenback remains strong against the other major currencies of the world, then the upside in gold futures prices will be limited.–Stay tuned!–Jim Wyckoff