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James Hyerczyk
Comex Gold

Gold futures are under pressure early Friday as increased optimism over a U.S.-China trade deal reduced the precious metal’s appeal as a safe-haven asset. Hopes for a trade deal were fueled late Thursday after White House economic adviser Larry Kudlow said an agreement could come soon.

Kudlow provided a ray of hope for risk-takers when he said negotiations over the first phase of a trade agreement with China were coming down to the final stages, with the two sides in close contact.

Speaking after an event at the Council on Foreign Relations late Thursday in Washington, Kudlow told reporters that a deal was close though “not done yet.”

“We are coming down to the short strokes,” Kudlow said. “We are in communication with them every day right now.”

At 07:58 GMT, December Comex gold futures are trading $1464.90, down $8.50 or -0.58%. Last Friday’s close was $1462.90. A close under this level will erase all of this week’s gains.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1446.20 will signal a resumption of the downtrend. The main trend will change to up on a move through $1519.10.

The main range is $1412.10 to $1566.20. Its retracement zone at $1471.00 to $1489.20 stopped the short-covering rally at $1475.50 on Thursday. This zone is controlling the near-term direction of the market.

The short-term range is $1519.00 to $1446.20. Its 50% level at $1482.60 is additional resistance.

The new minor range is $1446.20 to $1475.50. Its 50% level or pivot at $1460.90 is potential support today.


Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $1464.90, the direction of the December Comex gold futures the rest of the session on Friday is likely to be determined by trader reaction to the main Fibonacci level at $1471.00.

Bearish Scenario

A sustained move under $1471.00 will indicate the presence of sellers. The first downside target is the minor 50% level at $1460.90. Watch for a technical bounce on the first test of this level. If it fails then look for the selling to possibly extend into the main bottom at $1446.20. This is a potential trigger point for an acceleration to the downside with the August 1 bottom at $1412.10 the next likely downside target.

Bullish Scenario

A sustained move over $1471.00 will signal the presence of buyers. If this move creates enough upside momentum then look for buyers to make a run at this week’s high at $1475.50. Taking out this level could lead to a labored rally with potential targets a pair of 50% levels at $1482.60 and $1489.20. The latter is a potential trigger point for an acceleration to the upside.

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