Gold Price Futures (GC) Technical Analysis – Close Under $1537.60 Forms Potentially Bearish Closing Price Reversal Top

Gold posted a volatile trading session on Monday, first rallying to a more than six-year high as investors bet that an escalation of U.S. trade tensions with China would lead to a U.S. economic slowdown and lower interest rates, then falling sharply from its high after President Trump signaled a possible resumption of U.S.-China trade talks.

At 17:12 GMT, December Comex gold is trading $1537.00, down $0.60 GMT or -0.03%.

After the initial break, however, the selling stalled as traders waited for confirmation from China that the trade talks would indeed resume. Rising Treasury yields, a stronger U.S. Dollar and increased demand weighed primarily on gold prices.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, the intraday price action has put the market in a position to form a potentially bearish closing price reversal top. If this occurs and the chart pattern is confirmed then we’ll see a shift in momentum and the start of a potential 2 to 3 day correction.

A trade through the intraday high at $1565.00 will signal a resumption of the uptrend. The main uptrend is safe for now.

The minor trend is also up. A trade through $1488.90 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is $1488.90 to $1565.00. Its 50% level or pivot at $1527.00 is minor support.

The short-term range is $1412.10 to $1565.00. Its retracement zone at $1488.50 to $1470.50 is support and a value zone.

Daily Technical Forecast

Based on the early price action and the current price at $1537.00, the direction of the December Comex gold market into the late session close is likely to be determined by trader reaction to Friday’s close at $1537.60.

Bullish Scenario

A sustained move over $1537.60 will indicate that buyers are coming in to defend against a closing price reversal top. If successful, this could lead to a late session rally with potential targets a series of uptrending Gann angles at $1548.10, $1552.40 and $1554.60. Crossing to the strong side of these angles will put the market in a strong position. This could lead to a retest of the intraday high at $1565.00.

Bearish Scenario

A sustained move under $1537.60 will signal that the selling is getting stronger. This could trigger a break into the pivot at $1527.00. Taking out this level could trigger an acceleration to the downside with the next target last week’s low at $1502.10.

A close under $1537.60 will form a closing price reversal bottom. This could shift momentum to the downside if confirmed.