Spot gold is trading lower Wednesday after failing to extend Tuesday’s bounce from $4,103.52. The main trend is down according to the daily swing chart.

A trade through $4,399.67 will change the main trend to up. A move through $4,103.52 will reaffirm the downtrend.

The first resistance is the long-term 61.8% level at $4,230.51. Overtaking this level could extend the recovery into the 50% level at $4,319.61, followed closely by the 50-day moving average at $4,331.64.

On the downside, a break through $4,103.52 would expose the main bottoms at $3,996.06, $3,959.80 and $3,942.10.

What to Watch

The Fed minutes and the 10-year auction are what gold has to get through Wednesday. Both hit with the dollar firm again and the long end back near its highs.

I’m watching the 10-year more than any single line in the minutes. The auction shows what it costs to get somebody to own long-dated paper right now. Gold has been trading off that number all week. The minutes are the other half. Traders already know the committee hiked in September. What they don’t know is how many officials saw the jump in long-term yields as doing some of the Fed’s work for it. That’s the part that decides how December stays priced. The dollar is the third piece. It’s back within reach of Monday’s high with gold leaning on its own low.

Spot gold topped at $4,170.00 early and slid back toward Tuesday’s $4,103.52 low by mid-morning in London. The bias is to the downside while the main trend is down and spot gold remains below the 61.8% level at $4,230.51 and the 50-day moving average.