Gold Price Futures (GC) Technical Analysis – Strengthens Over $1499.30, Weakens Under $1494.20

Gold is trading flat on Thursday shortly after the regular session opening. This is no surprise since the market has been rangebound since October 11. The day that President Trump announced phase one of the partial trade deal between the United States and China. The trading range that day was $1508.00 to $1478.00.

At $13:00 GMT, December Comex gold futures are trading $1495.60, down $0.01 or -0.01%.

Two weeks of price action suggests gold investors are not too concerned about Brexit or next week’s expected rate cut by the U.S. Federal Reserve. However, they are worried about the trade deal.

Gains are likely to continue to be capped as long as the U.S. and China are still negotiating. The market is likely to drop sharply if the two economic powerhouses announce a partial deal has been struck. If trade talks stall or either side makes a negative statement then we’re likely to see a short-covering rally.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1478.00 will signal a resumption of the downtrend. Taking out the swing bottom at $1465.00 will reaffirm the downtrend. The main trend will change to up on a move through the last swing top at $1522.30.

Since the market has been trading inside $1508.00 to $1478.00 for nine trading sessions, some traders may even want to treat these two levels as breakout points.

On the downside, the major support zone is $1489.10 to $1471.00.

On the upside, a series of 50% retracement levels come in at $1496.00, $1504.20 and $1515.60.

Daily Technical Forecast

Based on the early price action and the current price at $1495.60, the direction of the December Comex gold futures contract the rest of the session on Thursday is likely to be determined by trader reaction to a pair of Gann angles at $1494.20 and $1499.30.

Bullish Scenario

A sustained move over $1499.30 will indicate the presence of buyers. This could trigger a surge into the 50% level at $1504.20. This is another trigger point for an acceleration into the 50% level at $1515.60.

Bearish Scenario

A sustained move under $1494.20 will signal the presence of sellers. This could trigger a break into the main 50% level at $1489.10, followed by the uptrending Gann angle at $1482.00.

If the angle at $1482.00 fails then look for the selling to possibly extend into the low at $1478.00, followed by an uptrending Gann angle at $1473.40, the main Fibonacci level at $1471.00 and the main bottom at $1465.00.

Side Notes

Every analyst is expecting a breakout after two weeks of sideways action. However, they work best when the volume rises on the move. Breakouts tend to fail when the volume is low.