Gold futures notched its eighth consecutive winning session on Tuesday kicking off 2018 trading at levels not seen since September 2017.
The mid-December bullish run originated at the conclusion of the last FOMC meeting of 2017. The Fed announced one additional rate hike as the year came to a close indicating that increased inflation is likely on the horizon. Rising inflation coupled with ambiguity surrounding the impact of the Tax Cuts and Jobs Act of 2017 further weakened the U.S. Dollar pushing the precious metal to 3-month highs. Geopolitical concerns also helped support a rise in Gold Futures. Most recently, violent anti-government protests in Iran strengthened the safe haven asset and oil markets.
The above chart, created for free using the award winning NinjaTrader platform, showcases the daily Gold Futures contract since mid-2017.
Utilizing NinjaTrader’s Swing Indicator, technical analysts can quickly spot potential support and resistance levels marked by the yellow and blue dots, respectively. Bullish traders can look for closes above the 1312 levels with a long-term outlook targeting the 1365 range. Bears on the other hand can keep a keen eye on the 1294 level for additional moves to the downside. While the 1294 level does not mark the most recent low, this area has acted as support for a number of trading sessions from October – December.
Always keep in mind that trading commodities or any asset class comes with an inherent amount of risk. Protective stops and proper risk mitigation measures are vital. Past performance is not indicative of future results.