Gold Price Futures (GC) Technical Analysis – Poised to Challenge Five-Week High at $1491.60

Gold futures posted a solid gain on Monday on extremely low trading volume ahead of the holiday season, with lingering concerns about the health of major global economies driving demand for the precious metal.

“Investors are looking at political risks in the longer term… There are potential economic risks still in the majority of economies. That’s not going to go away in a hurry,” said INTL FCStone analyst Rhona O’Connell.

“The United States and China have still not signed a so-called Phase One trade deal and tensions in the Middle East are contributing to gold’s appeal,” she added. Gains may have been capped by comments from President Trump on Saturday. Trump said the United States and China would “very shortly” sign the trade agreement.

Perhaps offering some support for gold prices was weaker than expected economic data. Core Durable Goods Orders came in at 0.0% versus 1.5%. Durable Goods Orders were -2.0% versus 0.2% and New Home Sales were 719K versus 730K.

On Monday, February Comex gold settled at $1488.70, up $7.80 or +0.53%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1491.60 will signal a resumption of the uptrend. The main trend will change to down on a move through $1463.00.

The minor trend is also up. A trade through $1474.30 will change the minor trend to down. This will also shift momentum to the downside.

The support is layered at $1477.30, $1472.30 and $1467.80.

The main range is $1525.20 to $1453.10. Its 50% level at $1489.10 was tested on Monday.

The next target is the major 50% level at $1495.30. This is also a potential trigger point for an acceleration to the upside with the next target a 50% level at $1512.40.

Daily Swing Chart Technical Forecast

Based on Monday’s close at $1488.70, the direction of the February Comex gold market on Tuesday is likely to be determined by trader reaction to the short-term 50% level at $1489.10.

Bullish Scenario

A sustained move over $1489.10 will indicate the presence of buyers. This is followed closely by the minor top at $1491.60 and the 50% level t $1495.30. Sellers could come in on the first test of this level, however, overtaking it could trigger an acceleration into the major target zone at $1512.40 to $1526.40.

Bearish Scenario

A sustained move under $1489.10 will signal the presence of sellers. If this move creates enough downside momentum then look for a potential break into the Fibonacci level at $1477.30, followed closely by the minor bottom at $1474.30.