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

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 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.