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James Hyerczyk
Gold Bars and Dollar
Gold Bars and Dollar

Gold futures are trading nearly flat early Thursday after optimism over a possible end to the U.S.-China trade dispute fueled a dramatic reversal to the upside during yesterday’s session. According to reports, senior U.S. officials sent an invitation to their Chinese counterparts to hold another bilateral trade meeting, raising speculation about a subtle shift in Washington policy.

At 0655 GMT, December Comex Gold futures settled at $1210.10, down $0.80 or -0.07%.

Daily December Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1220.70 will signal a resumption of the uptrend. The main trend will change to down on a trade through $1189.50.

The minor trend is also up. It changed back to up on Wednesday when buyers took out the previous minor top at $1212.70. The minor trend will change to down when sellers take out $1192.70. This move will also negate a closing price reversal bottom.

The main range is $1244.70 to $1167.10. The market is currently trading inside its retracement zone at $1205.90 to $1215.10. This zone is controlling the near-term direction of the market.

The minor range is $1167.10 to $1220.70. Its retracement zone at $1193.90 to $1187.60 is support. This zone stopped the selling at $1192.70 on Tuesday. This zone is controlling the direction on the downside.

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Daily Technical Forecast

Based on the early trade on Thursday, the direction of the December Comex Gold futures contract on Thursday will likely be determined by trader reaction to the uptrending Gann angle at $1205.10 and the Fibonacci level at $1215.10.

Under the current price at $1210.10 is a downtrending angle at $1207.70, the 50% level at $1205.90 and an uptrending Gann angle at $1205.10. Let’s call $1205.90 to $1205.10 a support cluster.

Look for a potential acceleration to the downside if $1205.90 fails as support. The daily chart is wide open to the downside with $1193.90 and $1192.70 the first two targets.

Holding above $1207.70 will signal the presence of buyers. If this can generate enough upside momentum then look for a possible drive into $1215.10. This level is the trigger point for a potential acceleration into the main top at $1220.70, followed by a long-term downtrending Gann angle at $1226.20.

Basically, you can use the retracement zone for direction. A sustained move over $1215.10 will indicate the buying is getting stronger, while a sustained move under $1205.90 will signal that the selling is getting stronger.

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