December Comex gold futures are presently trapped in a trading range at higher price levels, bound by strong overhead technical resistance at the September high of $1,025.80 and by solid technical support at $983.20. A close in December gold above the September high would provide the bulls with fresh upside near-term technical momentum to then suggest a fresh leg up in prices in the near term. If December gold futures close below strong technical support at the bottom of the range, at $983.20, then fresh near-term technical damage would be inflicted to then suggest a near-term market top is in place and that prices would then trend sideways to lower.
The Moving Average Convergence Divergence (MACD) indicator overlaid on the daily bar chart for December gold futures is presently in a bearish posture, as the MACD line is below the trigger line of the indicator, and both lines are trending lower. Both lines are also in a posture similar to the posture of the lines seen in early June–after which time the gold futures market did trend lower for the next four weeks.
Importantly, gold futures prices will continue to be held hostage to the price movement of the U.S. dollar versus the other major currencies. If the greenback continues to weaken, then gold prices are likely to trade sideways to higher. However, if the U.S. currency does start to show some sustained strength against the other major world currencies, then it would be likely that gold prices would trend sideways to lower. Stay tuned! Jim.