Gold (GC) Analysis, Key-Zones, Setup for Thu (Oct 15)Gold FuturesCOMEX:GC1!MyAlgoIndexBias: The December gold contract settled Wednesday at 4,107.9, down 69.4 or 1.66 percent, for a third consecutive lower settle. The session traded between 4,193.5 and 4,095.0, a 98.5 point daily range with a lower high and a lower low against Tuesday, and the settle finished 13.1 percent of the way up from the low. Those extremes are the completed-session inputs behind the published pivot ladder, and they match the chart's daily bar. The settle was the lowest since 08/03 and the decline the largest since 09/28. The September inflation report at 8:30 AM ET came in above forecast on the annual and core monthly measures, and the 8:30 AM ET 30-minute bar fell from 4,179.6 to a 4,107.2 low before closing at 4,119.9. The news feed carried that traders added to bets on Federal Reserve increases and fully priced two by the end of January. The dollar index closed at 102.55, up 0.37, and short-dated bill yields rose while the ten-year yield index closed at 5.19 percent after trading as high as 5.33 percent. December silver fell 6.13 percent to 55.877, lifting the gold-to-silver ratio to 73.52. The settle sits beneath every settlement average from the 5-day to the 200-day, negative direction leads on the 9-day and 14-day directional systems, and the composite multi-indicator snapshot reads "80% SELL" with direction "Strongest". The gold fund's options positioning shows negative call gamma, which in this review's interpretation does not dampen moves. In this review's interpretation the bias is lower while the contract holds beneath the 4,143 to 4,149 resistance band, with the 14-day raw stochastic at 6.41 percent pointing to stretched conditions that can produce sharp rebounds. In this review's interpretation the first-order scheduled item on Thursday is the September producer price index at 8:30 AM ET, per the verified forward calendar, through its effect on the dollar and rate expectations. Resistance: - 4,230.6 Pivot R2 - 4,208.7 18-day average crossing price for Thursday - 4,193.5 Wednesday's session high - 4,178.5 three standard deviations resistance - 4,177.3 Tuesday's settle - 4,169.3 Pivot R1 - 4,165.5 two standard deviations resistance - 4,148.7 one standard deviation resistance - 4,143.3 momentum projection level - 4,132.1 Pivot Point Support: - 4,095.0 Wednesday's session low - 4,091.2 one-month low - 4,084.6 published target price - 4,070.8 Pivot S1 - 4,067.1 one standard deviation support - 4,050.3 two standard deviations support - 4,033.6 Pivot S2 - 4,019.0 13-week low - 4,015.6 52-week low - 3,972.3 Pivot S3 Primary Setup: SHORT the December contract from the 4,145 to 4,155 band around the momentum projection level at 4,143.3 and one standard deviation resistance at 4,148.7, stop 4,172 above Pivot R1 at 4,169.3. Targets at 4,128 first, beneath the Pivot Point at 4,132.1, 4,106 second, just beneath Wednesday's 4,107.9 settle, and 4,084 third, just beneath the published target price at 4,084.6. Risk to reward is roughly 1:1 to the first objective, 1:2 to the second and 1:3 to the third from the entry midpoint. The 14-day average true range is 85.9 points against a 22 point stop distance. A settle above 4,169.3 negates the thesis; two consecutive 30-minute closes above 4,155 remove the edge before the stop is reached. The settle sits beneath the entry band, so the setup needs a rally to engage. A soft producer-price print that reverses the dollar's gain is the main risk to a short, which makes this an analyst judgment that the decline resumes from a rally. The 4,107.9 settle sits 16.7 points above the one-month low after the widest range since 10/07. In this review's interpretation Thursday is a test of whether rallies stall beneath the 4,143 to 4,149 band, with Pivot R1 at 4,169.3 the line between a rebound and a return toward Wednesday's 4,193.5 high.