Gold Price Futures (GC) Technical Analysis – Downtrend Resumes on Trade Through $1492.10

Gold futures retreated from a one-week high on Thursday after a Chinese state media report suggested that China wants to reach an agreement with the United States to avoid any escalation in a protracted trade row, soothing investor concerns.

Chinese Vice Premier Liu He said that Beijing is willing to reach an agreement with Washington on matters both sides care about, China’s Xinhua state news agency reported.

Demand for risky assets surged on the news and Treasury yields soared. Gold futures plunged even though the U.S. Dollar broke sharply against a basket of currencies. The greenback fell as money moved into emerging market currencies. The British Pound jumped against the dollar as U.K. and Irish leaders said there is a pathway to a possible Brexit deal.

At 18:43 GMT, December Comex gold futures are trading $1500.70, down $12.10 or -0.80%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom at $1465.00 on October 1.

The main trend will change to up on a trade through $1525.80. A move through $1492.10 will signal a resumption of the downtrend.

Resistance is 50% levels at $1504.20 and $1515.60. Support is 50% levels at $1495.40 and $1489.10. If $1489.10 fails then look for the support to potentially extend into the Fibonacci level at $1471.00.

Daily Technical Forecast

Based on the early price action and the current price at $1500.70, the direction of the December Comex gold futures contract into the close on Thursday is likely to be determined by trader reaction to the 50% level at $1495.40.

Bearish Scenario

A sustained move under $1495.40 will indicate the selling is getting stronger. The next target is the uptrending Gann angle at $1493.00, followed by the main bottom at $1492.10 and the main 50% level at $1489.10.

The 50% level at $1489.10 is the trigger point for an acceleration to the downside with the next target angle coming in at $1479.00.

Bullish Scenario

A sustained move over $1495.40 will signal the return of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the 50% level at $1504.20. Overtaking this level could trigger a short-covering rally into a downtrending Gann angle at $1514.20.