Gold Price Futures (GC) Technical Analysis – Trade Through $1565.00 Signals Resumption of Uptrend with $1525.60 New Main Bottom

After coming close a steep breakdown on Friday and the formation of a potentially bearish weekly closing price reversal, gold futures are rebounding on Monday, coming within striking distant of last week’s multi-year high.

Last week’s weakness was fueled by the hope of progress toward a resolution of prolonged U.S.-China trade dispute with the resumption of trade negotiations scheduled later this week. Today’s strength was primarily triggered after weak manufacturing data from the United States reinforced fears of an economic downturn.

At 17:37 GMT, December Comex gold is trading $1555.40, up $26.10 or +1.71%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1565.00 will signal a resumption of the uptrend. The market is not in a position to change the main trend to down, but there is room for a normal 50% to 61.8% correction.

The minor trend is also up. A trade through $1525.60 will change the minor trend to down. This will also confirm the weekly closing price reversal top, while confirming a shift in momentum to the downside.

The minor range is $1565.00 to $1525.60. Its 50% level or pivot is $1545.30. Crossing to the strong side of this pivot makes this level support.

The next minor range is $1488.90 to $1565.00. Its 50% level or pivot at $1527.00 is support. This price level is also the trigger point for a steep breakdown. Traders tried to break the market on Friday, but the selling stopped at $1525.60.

The short-term range is $1412.10 to $1565.00. If there is a breakdown then its retracement zone at $1488.50 to $1470.50 will become the primary downside target.

Daily Swing Chart Technical Forecast

Based on the price action late in the session, the direction of the December Comex gold market into the extended close is likely to be determined by trader reaction to a downtrending Gann angle at $1555.00.

Bullish Scenario

A sustained move over $1555.00 will indicate the buying is getting stronger. This could trigger a rally into a pair of downtrending Gann angles at $1560.00 and $1562.50. The latter is the last potential resistance angle before the $1565.00 main top.

Taking out $1565.00 will signal a resumption of the uptrend. Crossing to the strong side of the uptrending Gann angle at $1572.90 will put the gold market in an extremely bullish position.

Bearish Scenario

A sustained move under $1555.00 will signal that the buying is getting weaker or the selling is getting stronger. The first downside target is the minor pivot at $1545.30. If this fails then look for the selling to possibly extend into the next minor pivot at $1527.00 and the minor bottom at $1525.60.