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Gold Price Futures (GC) Technical Analysis – Holding Earlier Gains Despite Extremely Light Volume

James Hyerczyk

Gold prices jumped on Monday as U.S.-China trade deal hopes faded following a report China wanted further trade talks before finalizing a so-called “phase one” of the deal. The move was mostly fueled by short-covering after last week’s steep sell-off, and some safe-haven hedging as interest rates dropped on the news along with demand for risky assets.

At 05:29 GMT, December Comex gold futures are trading $1497.40, up $8.70 or +0.59%.

After the initial move to the upside, the market became rangebound due to low holiday volume.

Daily December Comex Gold

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1478.00 will reaffirm the downtrend. The main trend will change to up on a trade through $1522.30.

The market has also been caught inside a series of retracement levels since October 1. This has been causing a choppy, two-sided trade. Not only have traders been worried about a U.S.-China trade deal, but they have also been trying to determine whether the Fed will cut rates a third time this year at the end of October.

The support is a major retracement zone at $1489.10 to $1471.00. Potential resistance levels come in at $1495.40, $1504.20 and $1515.60.

Daily Technical Forecast

Based on the early price action and the current price at $1497.40, the direction of the December Comex gold market into the close on Monday is likely to be determined by trader reaction to the short-term pivot at $1495.40.

Bullish Scenario

A sustained move over $1495.40 will indicate the presence of buyers. This could lead to a labored rally due to a series of potential resistance levels including the uptrending Gann angle at $1501.00, a 50% level at $1504.20 and a pair of downtrending Gann angles at $1510.20 and $1515.30.

Bearish Scenario

A sustained move under $1495.40 will signal the presence of sellers. This could trigger a retest of the next 50% level at $1489.10, followed closely by an uptrending Gann angle at $1483.00.

This article was originally posted on FX Empire