Gold Price Futures (GC) Technical Analysis – Trading on Weak Side of Key Retracement Zone at $1461.30 to $1481.30

Gold prices are down sharply late Monday, hitting a two-week low as investors’ appetite for riskier assets increased on renewed optimism that the United States and China were close to reaching “phase one” of their long awaited trade deal.

Beijing and Washington were “very close” to an initial trade agreement, Chinese newspaper Global Times reported, citing experts close to the talks. The selling pressure on gold started early in the session after the weekend announcement that China would seek to improve protections for intellectual property rights, a sticking point in the talks. Intellectual property rights protection “is a key element the U.S. wants China to reform in order to reach a trade deal.

At 20:11 GMT, December Comex gold is trading $1454.90, down $8.70 or -0.59%.

In other news, speculators increased their bullish positions in COMEX gold and silver in the week to November 19, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1446.20 will reaffirm the downtrend. The main trend will change to up on a move through $1479.20.

The minor trend is also down. The minor trend changed to down on a trade through $1456.60. This move also signaled a shift in momentum to the downside.

The main range is $1396.40 to $1566.20. Its retracement zone at $1461.30 to $1481.30 is resistance. Trading below this zone is helping to generate the downside bias.

Daily Technical Forecast

Based on the early price action and the current price at $1454.90, the direction of the December Comex gold futures contract into the close on Monday is likely to be determined by trader reaction to the main Fibonacci level at $1461.30.

Bearish Scenario

A sustained move under $1461.30 will signal the presence of sellers. Taking out the minor bottom at $1456.60 with conviction could trigger sharp break into a long-term uptrending Gann angle at $1447.90, followed by the main bottom at $1446.20.

Taking out $1446.20 will not only reaffirm the downtrend, but it could trigger an acceleration to the downside with the next target angle coming in at $1422.20, followed by the main bottom at $1412.10.

Bullish Scenario

A sustained move over $1461.30 will signal the return of buyers. This could trigger an acceleration into a minor Fibonacci level at $1471.00, followed by a main top at $1479.20.